Oriental Bank to axe redundant branches

Source:BL:ANJANA CHANDRAMOULY:Bangalore, Feb. 23:  2011

Oriental Bank of Commerce wants to do away with redundant branches in its network which arose due to the merger of Global Trust Bank with the bank. 

This measure would help improve its CASA (current account savings account) ratio, according to a top official of the bank.

“Thanks to the merger of GTB with our bank, there is certain redundancy in the branch network. We want to combine businesses of some branches and under the RBI's relaxed licences policy, use these licences for opening branches in residential areas that are not represented. 

That will help improve our CASA,” Mr Nagesh Pydah, Chairman and Managing Director, Oriental Bank of Commerce, told Business Line.

The bank is already on the job, and “in the next 90 days you will see a substantial difference,” he said, pointing out that about 65-70 branches have been identified across the country in metros and urban towns.

 Redundancy normally comes in a metro branch after it reaches a certain age and hence the growth plateaus, he said. Currently, the bank has 1,608 branches and 1,200 ATMs in the country.

The bank's CASA levels are currently around 25 per cent, and one of the priorities for the new chairman and managing director of this bank is to take it to about 30-32 per cent in a year.

In order to achieve this, the bank has campaigns targeting specific groups including students. “We have also launched a concerted drive for salary accounts,” said Mr Pydah.

Besides, the financial inclusion programme also threw up tremendous opportunities, he pointed out. The bank has been allotted 570 villages for the drive, of which it has to cover 300 by March 2011.

The bank has also drawn up an interim business plan to reach business of Rs 4 lakh crore by March 2013; currently it has Rs 2.2-lakh crore business.

“Except that the liquidity constraint, there is not much of a challenge to achieve this,” he said.

Dhirendra Swarup nominated FPSB India Chairman

Source; PTI:Business Line:MUMBAI, FEB 24:2010

The Financial Planning Standards Board India (FPSB India) today announced the nomination of Dhirendra Swarup as its new Chairman.

Mr Swarup was the Chairman of the Pension Fund Regulatory and Development Authority (PFRDA) till last year.

He has behind him an illustrious career as a civil servant and retired as the Secretary (Expenditure & Budget) in the Union Ministry of Finance, a release said here.

“The Indian financial services industry is due for a major introspection, which is necessary pursuant to recent initiatives by various regulators to bring an element of advice in selling of financial products,” Mr Swarup said.

“FPSB India, backed by the commitment of 50 leading financial brands and the support of all stakeholders, will strive to bring the benefits of informed investment decision-making closer to investors in India,” he said.

The other nominated board members are the Dhanlaxmi Bank Managing Director & CEO, Mr Amitabh Chaturvedi, the ICICI Securities Executive Director, Mr Anup Bagchi, the Hindustan Times Executive Editor, Mr Gautam Chikermane, the Brain Point Investment Centre CEO, Mr Jaideep Kahikar, Partner-Desai Desai Carrimjee & Mulla, Advocates & Solicitors, Mr Kedar Desai, and the Ghalla & Bhansali Securities’ Managing Director, Mr Mukesh Dedhia.

FPSB India was established by 50 leading financial institutions across all sectors and verticals. 

It closely works with all stakeholders — the government, corporates, regulators, industry associations, the media and the general public to achieve its objective of financial planning norms.

SBI set to emerge a giant in 18 months on merging arms

Source:Business Line :K. R. SRIVATS :NEW DELHI, FEB 23: 2011

SBI to consolidate all subsidiary banks with itself in 12-18 months

If the Finance Ministry had its way, the State Bank of India (SBI) would become a mammoth bank in about 18 months.

It has told the Parliamentary Standing Committee on Finance that SBI is looking to consolidate all its subsidiary banks with itself “within a period of 12 to 18 months”.

This consolidation will be “immensely beneficial” to the SBI Group as it would bring in economies of scale, reduce administrative overheads, help re-deploy and channelise trained manpower to business development.

This process would also reduce avoidable competition from different arms of the same SBI group engaged in the same activity in the same segments and geography. “The consolidation is aimed at making the State Bank Group a stronger and more resilient organisation,” the Finance Ministry has said.

Although SBI is the largest bank in India, it ranks only 68th among the world's largest banks. Considering the growing role and importance of India in the world economy, it is desirable that the country's largest bank is sufficiently strong in terms of balance sheet size to cater to the growing requirements especially of Indian-origin multinational companies, according to the Finance Ministry.

Mr R. Gopalan, currently Economic Affairs Secretary, and other senior officials of the Department of Financial Services had represented the Finance Ministry before the Standing Committee on Finance in November last year.

“While SBI has also stepped up its efforts to grow organically, the inorganic growth through mergers would also help the bank in scaling up within an acceptable time frame, to enable it to compete on an equal footing with foreign banks, not only in India but in the international economic arena as well,” the standing committee was informed.

Currently, SBI has five associate banks with controlling interest ranging from 75-100 per cent. These associate banks are State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.

SBI has been active with its consolidation efforts and over the last two years acquired two of its subsidiary banks — State Bank of Saurashtra and State Bank of Indore.

Meanwhile, the Finance Ministry has conveyed to the Standing Committee on Finance headed by Mr Yashwant Sinha that the merger/acquisition of its subsidiary banks by SBI should not be seen as a merger in the conventional sense but is more in the nature of restructuring within the Group as SBI already held 75 per cent or more equity stake in all its subsidiary banks.

“The merger of subsidiary banks with itself is thus more in the nature of restructuring leaving size, market share etc of the Group unchanged but leading to better operational efficiency,” the Finance Ministry has said.

The Finance Ministry has also highlighted that the technology platform of SBI and that of subsidiary banks is the same.

Also, many of the policies of the SBI and its subsidiary banks such as loan policy, investment policy are similar. All the associate banks have products, services and processes broadly similar to that of SBI.

CBI raids Kalaignar TV

Source :CHENNAI:Expressbuzz :18 Feb 2011 05:20:44 PM IST

 The Central Bureau of Investigation (CBI) Friday raided the office of Kalaignar TV, promoted by family members of Tamil Nadu Chief Minister M. Karunanidhi, in connection with the 2G spectrum allocation scam, sources said.

While CBI officials were unavailable for comment, the company said it would issue a statement later on.

The channel is under the CBI scanner for its Rs.200 crore loan transaction with Cineyug Films which is connected to Shahid Usman Balwa of Swan Telecom.

"I am not aware of the raids as reported by television channels," said Karunanidhi's daughter Kanimozhi, who is one of the major promoters of the company that owns Kalaignar TV channel.

Queried about the transaction with Cineyug Films, she said: "The company head Sharad (Kumar) has issued a detailed statement clarifying the transaction. I don't know how this is linked to telecom companies."

The company's Managing Director Sharad Kumar had Wednesday welcomed investigative agencies to verify its books and documents in connection with the loan transaction the company had entered into with Cineyug Films.

Referring to his Feb 10 statement, where he had clarified that Kalaignar TV had no connection with the 2G spectrum allocation made in 2007-08 and the loan transaction with Cineyug Films Pvt Ltd in 2009, he said: "Despite the clarification, the CBI has mentioned about the loan transaction in the court."

The CBI has alleged a connection between Swan Telecom's Balwa and Kalaignar TV.

Seeking further remand of Balwa, the CBI had claimed before the court that Balwa was favoured by former union communications minister A. Raja in the allocation of spectrum.

According to Kumar, Cineyug gave some money as advance towards the acquisition of stakes in Kalaignar TV in 2009.

"Owing to the differences in valuation of the shares of two companies, a sum of Rs.200 crore received till August 2009 was considered as a loan and was paid back by Kalaignar TV along with an interest of Rs.31 crore," Kumar had said in a statement earlier.

He also said the transaction was reported to the Income Tax Department and the relevant tax had been paid.

Karunanidhi's wife Dayalu and his daughter and Rajya Sabha MP Kanimozhi together hold majority stake in the company.

Former communications minister A. Raja resigned for his alleged involvement in the 2G spectrum allocation scam, which caused huge losses to the national exchequer. He was Thursday sent to Tihar Jail on 14 days judicial custody by a Delhi court.

Fake currency racket busted at Hydrabad

ISI LINKS:Additional Commissioner of Police A.R. Anuradha presents the three-member gang before the media in Hyderabad on Saturday.

 Source : The Hindu :Sunday, Feb 13, 2011

HYDERABAD: Police on Saturday arrested three persons from Kurnool who procured fake

Counterfeit currency notes of Rs. 500 and Rs. 1,000 denominations having face value of Rs. 6.5 lakh and a Santro car were seized from them, the Commissioner's Task Force DCP, V.B. Kamalasan Reddy, said. Among the arrested was Akula Narendra Kumar Reddy, 36, a businessman from Banganapally of Kurnool presently living at Ramanthapur here.

Police believe Pakistan's Inter Services Intelligence (ISI) is behind printing fake Indian currency notes appearing exactly like original ones using latest technology. This is part of their plans to destabilise Indian economy by pumping in fake notes.

Earlier, the agency used to smuggle counterfeit notes through borders along Pakistan. Due to increased surveillance, the fake notes are being sent through porous points along Bangladesh border through West Bengal now.

Before joining hands with gangs circulating fake currency, Reddy was lodged in prison in a murder case. After coming out on bail, he bought a lorry and leased it out to an operator in Chitradurg where he came in contact with a person called Jaya Laxmi supplying counterfeit currency printed in Pakistan.

In 2007, the Nandyal police arrested Reddy while trying to circulate fake currency notes. Three years later, the accused met Shafir and Amir -- both from West Bengal -- who were procuring fake currency notes from a person named Kabeer Hussain of Bangladesh, through a mediator P. Kumar.

Reddy and his associates circulated fake currency notes having face value of Rs. 65 lakh in Andhra Pradesh from April to August last year. The Kadapa district police arrested two of Reddy's accomplices while he managed to escape. Since then, he shifted to Ramanthapur and is operating from here. On a tip-off about his operations, the TF (West) kept tab on his movements and caught him along with his associates, Syed Hussain, 20, and Maqbool Husain, 20, at Mehdipatnam.

ISRO-Devas S-Band spectrum deal cancelled

Source ;New Delhi:  

NDTV Correspondent, Updated: February 17, 2011 13:56 IST

The controversial S-Band deal between Indian Space Research Organisation's commercial wing Antrix and Devas Multimedia has been cancelled. 

The decision to terminate the contract was taken at a meeting of the Cabinet Committee on Security (CCS). The meeting was attended by the Prime Minister Manmohan Singh, Home Minister P Chidambaram, Defence Minister A K Antony, Finance Minister Pranab Mukherjee and Law Minister Veerappa Moily.

"Antrix S-Band deal with Devas is annulled. The government can't provide S-Band spectrum for commercial activities. We have considered legal aspects of Devas deal and are ready to face them in court. Devas is not likely to succeed," said Veerappa Moily. 

The decision came a day after the Prime Minister strongly rejected any suggestions that his office continued talks with Devas on its controversial deal with Antrix for lease of S-Band spectrum after the Space Commission decided to scrap it.

Antrix Corporation, ISRO's commercial arm, had signed a contract with Devas Multimedia in January 2005 for lease of 90 per cent transponders in two satellites to be built by ISRO.

Bundled into the deal was 70 MHz of S-Band spectrum which was priced at Rs. 1000 crore.
    
A media expose claimed that the deal could have caused loss of over Rs. 2 lakh crore to the national exchequer.

"There have been no backroom talks... There has been no effort in the PMO to dilute in any way the decision taken by the Space Commission in July 2010. On that, I would like to assure you and the country," Singh said in an interaction with Editors of news channels.
     
However, he said that if there has been delay in scrapping the deal, this has been "only procedural".
     
"Though there has been some delay in processing, this was only procedural. The fact is that the contract was not operational in any practical sense," the Prime Minister said.

Earlier, objecting to a government move to annul its contract with Antrix following the S-Band spectrum controversy, Devas Multimedia has said it would take "strong" legal steps to protect its rights and interests.

Contending that it had a legally binding agreement with ISRO's commercial arm Antrix, Devas said it expected the government to fulfill all its obligations under the agreement

2G spectrum scam: Former Telecom Minister A Raja sent to Tihar Jail

Source ;New Delhi:NDTV:February 17, 2011 16:14 IST

Former Telecom Minister A Raja has been sent to Delhi's Tihar Jail till March 3. Raja will be in judicial custody for the next 14 days. He was arrested by the Central Bureau of Investigation (CBI) on February 2 in connection with 2G spectrum scam. His CBI custody ended today.

Sources say the CBI told the court today that Raja was not cooperating with the investigators and so it needed more time to question him.

Raja, the alleged mastermind of the 2G scam, is accused of selling spectrum at throwaway prices to companies in 2008 when they applied for mobile network licences.

On Wednesday, the CBI questioned Raja and Reliance Communication's Anil Ambani together for an hour. Ambani was reportedly questioned in connection with his company Reliance Communications being looked at as a beneficiary of 2G spectrum licence. The investigating agency is questioning all telecom players that got licences. 

The key issue the agency wanted to ask Anil Ambani was about Reliance Communications' investment in Swan Telecom. The CBI also wanted to check if Reliance met all the eligibility norms or if they were favoured by then Telecom Minister A Raja. The promoter of Swan Telecom, Shahid Balwa, was arrested by the CBI last week and has also been questioned.

CBI has accused the DMK leader of criminal conspiracy. It says that in 2008, when the government was allocating 2G spectrum for mobile phone networks, Raja twisted the rules to benefit a few companies - especially Swan and Unitech.

The licences for 2G spectrum were not auctioned as many say they should have been. Raja chose to follow a First-Come-First-Served policy which was set by his predecessors.

 But the CBI's case is based on his office advancing the deadline for payments and informing only some of the players.  Companies like Swan and Unitech seemed to have been tipped off to this, because despite the cut-off date being brought forward, they had their payments ready.

After winning their licences, Swan and Unitech sold equity to foreign companies much before they began the rollout of their services.  The giant profits they made seemed to underscore the point that spectrum had been sold far too cheaply by the government.

Swan paid Rs. 1,537 crore and sold 45% stake to Etisalat for a profit of Rs. 4, 730 crore.

Unitech paid Rs. 1,661 crore for its licence, and sold 60% stake to Telenor for Rs. 6,200 crore.

Together, these two players cost the government Rs. 7, 195 crore, according to the CBI. But both Swan and Unitech have denied these allegations.

SBI to offer 15-year retail bonds at 9.95%

Source :MUMBAI: TNN, Feb 15, 2011, 12.44am IST


State Bank of India will sell bonds to retail investors offering returns of 9.75% and 9.95% on 10- and 15-year bonds, respectively.

In a letter to the Bombay Stock Exchange, the bank said its central board has approved raising funds through the issue of subordinated debt (lower tier II bonds). It has approved selling bonds worth Rs 1,000 crore, with an option to retain oversubscription of up to Rs 1,000 crore. In case of retail demand, SBI can retain the oversubscription beyond Rs 2,000 crore up to Rs 10,000 crore.

This time around the bank is offering different rates for retail and non-retail investors. Non-retail investors, who include institutions and high net-worth individuals who invest in bulk, will receive 9.3% for 10 years and 9.45% for 15-year investments. The bank also has an option to pre-pay investors in the 10-year bonds after 5 years and after 10 years for 15-year bondholders.

Senior officials of the bank said that details regarding the opening of the issue would be announced on Tuesday. Although these investments are long-term in nature, investors are assured liquidity through the listing of these bonds.

Investment bankers who are distributing the issue say earlier experience suggests that SBI is bound to receive a huge oversubscription on the first day itself. "There are many banks that are offering 9.5% and above on fixed deposits. But these investments typically are for one-two years and interest rates are widely expected to come down in the long-term," said an investment banker.

SBI`s earlier retail bond issue, which offered a much lower return, was a huge success with the bonds being sold out on the first day. Successful investors got an opportunity to make equity-like gains as the bonds were listed at a 5% premium on listing. While the returns on the bonds are even better, the listing position would depend on the extent of unsatisfied demand in the public issue. Prices of SBI`s earlier bonds fell marginally on Monday, but the securities continue to trade at a significant premium over the issue price.

Although the size of the issue is minuscule compared to the bank`s balance sheet, the issue is part of an ongoing programme to develop a market for long-term resources. The bank presently funds all its long-term loans, which include home loans and loans to the infrastructure sector, through core savings deposits and medium-term deposits. The long-term bonds will enable the bank to match some of its long-term fixed liabilities
.

Antrix-showered-gold-coins-on-DoS-Isro-official

Source :NEW DELHI: Pradeep Thakur, TNN, Feb 16, 2011, 01.44am IST



Antrix Corporation, the commercial arm of Indian Space Research Organisation (Isro), gifted gold coins to officials of Department of Space (DoS) — the body which controls all its activities and is directly under the Prime Minister's Office (PMO).

Raising objection to the expensive gifts which cost Antrix 7% of its profit, Comptroller and Auditor General (CAG) has said that in violation of laid down norms and Central Vigilance Commission (CVC) guidelines, Antrix had gifted more than 15,600 gold coins measuring 4 grams each to officials of DoS and ISRO. A CVC order of September 2004 prohibits any public sector undertaking from giving gifts to government servants.

Interestingly, the expenditure of Rs 7.36 crore incurred for this generosity was 7% of the profit of Isro's commercial arm in that particular year. The gold coins were distributed to celebrate Antrix's 15th anniversary. The organizer also paid an amount of Rs 37 lakh as fringe benefit tax to the exchequer to make this possible.

Antrix's partnership with a private company, Devas, has already embarrassed the PMO as a perception is gaining ground that the latter is favouring the private entity by not annulling the Antrix-Devas contract despite a recommendation from DoS secretary and Isro chairman K Radhakrishnan. 

Though the Isro chairman had sought cancellation of the Antrix-Devas deal citing undue favour granted to Devas as the reason, way back in July 2010, government is yet to scrap it. To complicate matters further, the PMO has constituted another committee to review it. 

Raising concern, CAG observed that since DoS and Isro employees were "permanent government servants who were also eligible for special cash incentives at the time of every successful launch of satellites, giving gifts to them was not justified". 

Justifying its actions, DoS, in its response, said, "It was a small gesture shown by the company to DoS personnel to continue their contributions in this area." 

CAG, however, rejected the contention saying the reply of the management should be seen in the light of the fact that the value of gifts constituted approximately 7% of the profit after tax and that it violated CVC guidelines. 

Other beneficiaries of the gold coins included officials from Vikram Sarabhai Space Centre, National Remote Sensing Agency, Isro Satellite Tracking Centre and Master Control Facility. 

DoS is the administrative department in all matters relating to space systems. Antrix Corporation Limited was incorporated in September 1992 to function as the commercial arm of DoS with access to resources of DoS and ISRO to promote commercial exploitation of space products and to transfer technology developed by Isro.

Not aware of methods used in FCFS spectrum allocation: PM

Source ; PTI :NEW DELHI, FEB. 16:2011

 

The Prime Minister, Dr Manmohan Singh, today asserted that he was not aware of the methodology of the controversial first-come, first-serve (FCFS) policy followed for 2G spectrum allocation by former Telecom Minister, Mr A. Raja, which resulted in a huge scam estimated to be up to Rs 1.76 lakh crore.

“Who got the licences... how FCFS was implemented, this was never discussed with me nor was it brought to the Cabinet. This was exclusively the Telecom Minister’s decision,” Dr Singh said in an interaction with the editors from the electronic media.

He, however, said that since the Ministries of Finance and Telecom had agreed to continue with the existing policy of allocating 2G spectrum, “I did not feel that I was in a position to insist that auction must be insisted.”

The government auditor CAG had estimated a presumptive loss of up to Rs 1.76 lakh crore due to sale of spectrum in 2008 at 2001 prices.

This had forced Mr Raja to resign from the Union Cabinet in November last year and was followed by his arrest on spectrum 2G scam charges.

On retaining Mr Raja as the Telecom Minister in UPA-II, the Prime Minister said in a coalition government, the choices of the leaders of the alliance partners have to be accepted and that the DMK had suggested the induction of Mr Raja and Mr Dayanidhi Maran into the Union Cabinet.

“At that moment, there was no reason to feel that anything wrong had been done,” the Prime Minister said.

Anil Ambani at CBI headquarters

Source :PTI :NEW DELHI, FEB 16: 2011

Reliance Infocomm head Mr Anil Ambani on Wednesday appeared at the CBI headquarters and remained with the agency officials for nearly two hours in connection with the probe in the 2G scam. Mr Ambani?s visit pertained to the agency seeking clarification on certain documents relating to Swan telecom.

Reliance Infocomm had 9.9 per cent equity in Swan Telecom before Swan applied for new licence for 2G spectrum. Swan was promoted by DB Realty group headed by Shahid Usman Balwa, who is at present in CBI custody. The CBI is probing the financial trail between Swan Telecom and DMK owned Kalaignar television.

An ADAG statement said, ?During the course of his weekly visit to New Delhi, Mr Ambani met CBI officials today to clarify ongoing issues, relating to telecom matters for the years 2001 to 2010, and virtually every telecom operator in the country.? It said no summons of any kind have been issued by CBI to Mr Ambani.

The ADAG statement said, ?Neither Reliance Telecom nor RCOM nor any Reliance ADA Group individual, company or affiliate held even a single share in Swan Telecom Ltd at the time of grant of the 2G licence to them in January 2008,or at any time thereafter?.

Devas threatens legal action if deal with Antrix is annulled

Devas Multimedia Private Limited office at Jayanagar in Bangalore.
File Photo-V Sreenivasa Murthy

Source :PTI :NEW DELHI, FEB 16:

 

2011

Objecting to a government move to annul its contract with Antrix following the S-band spectrum controversy, Devas Multimedia on Wednesday said it would take “strong” legal steps to protect its rights and interests.

Contending that it had a legally binding agreement with ISRO’s commercial arm Antrix, Devas said it expected the government to fulfil all its obligations under the agreement and will take strong steps, including legal, to protect its rights.

“We have grave concerns regarding the government’s statement today on pre-meditated annulment of the agreement, despite pending high-power committee and CAG reviews which are still in the preliminary stages,” a statement issued by the Bangalore-based company said here.

It termed as “disturbing and inappropriate” the government’s “unilateral” decision to terminate the agreement “without due investigative process and without following the principles of natural justice”.

“In spite of the company’s willingness to co-operate and assist in required government reviews without prejudice to our legal rights, we have not yet heard from the government in this regard,” the statement said.

“The Devas-DOS/ISRO/Antrix Agreement is in line with the government’s 1997 SatCom Policy. The company has complied with all its obligations under this agreement and is in compliance with all laws and rules in respect of conducting its business,” it said.

“The company also notes the increasing public awareness of the vested political and business interests in conjunction with certain media organisations that have been instrumental in bringing about an intentional gross misrepresentation of the facts of Devas-DOS/ISRO/Antrix satellite transponder capacity lease and tying it inappropriately to unrelated telecom spectrum issues for their own purposes,” the statement said.

The Antrix-Devas Agreement - Part II

Source : the business line :Chennai :Feb 8,2011

 

Click here to open the Antrix-Devas Agreement - Part II

The Antrix-Devas Agreement - Part I

Source ; The Business line : Chennai : Feb 8,2011







Click here to open the Antrix-Devas Agreement - Part I