New a/c for 1,400cr lying unclaimed with banks

Souece :

NEW DELHI:

4 DEC, 2010, 05.04AM IST,ET BUREAU

 Banks could lose nearly Rs 1,400 crore of cheap funds lying in unclaimed deposits with the government deciding to create a fund to park these moneys and use it for depositor education. 

Funds in deposit accounts that have not been operated for more than 10 years will be credited into a “depositor education and awareness fund”, Finance Minister Pranab Mukherjee informed Parliament in a written reply to a question. 

“The government is contemplating to amend the Banking Regulation Act, 1949 for creating the Depositor Education and Awareness Fund,” finance minister said adding that the fund was conceived in consultation with the Reserve Bank of India. 

The depositors will get their money back if they make a claim later, along with interest at the rate decided by RBI. 

Currently, banks treat unclaimed deposits as regular deposits. The total amount outstanding under these deposits as on December 31, 2009 was Rs 1,360 crore. 

Canara Bank has over Rs 218 crore lying unclaimed while Punjab National Bank and Union Bank of India have over Rs 160 crore and Rs 100 crore in idle accounts. 

The proposed depositor education fund will be run by an authority or committee constituted by RBI. 

Banks will have to credit the funds into the account within three months of a dormant account becomes 10 years old. 

The move will help clear the administrative burden of unclaimed deposits and also prevent their possible misuse. At the end of December 2009, there were more than one crore such accounts with scheduled commercial banks. 

Recently, even the Employees’ Provident Fund Organisation had decided that it will stop paying interest on accounts that had not received any contribution for more than three years. 

The organisation hopes this will encourage subscribers to settle the accounts that are clogging the system.

Source ;ET :NEW DELHI:1 DEC, 2010, 10.48PM IST,PTI 


 Wipro Chairman Azim Premji will transfer company shares worth Rs 8,846 crore to his endowment trust later this month, with a view to fund philanthropic activities taken up by the body. 

Once the share transfer is complete, the promoters' stake in Wipro would come down to 72 per cent from 79.36 per cent at present, according to a company official. 

"Azim Premji will transfer 213 million equity shares (valued at approximately at Rs 8,846 crore at the current market price) of Wipro, held by certain entities controlled by him, to an irrevocable trust," Wipro said in a statement on Wednesday. 

The share transfer would be concluded on December 7.


 Asked if the move was aimed at bringing down the promoter s participating interest to 75 per cent, in line with proposed new norms making it mandatory for the public to hold a minimum 25 per cent stake in listed companies, Azim Premji Foundation CEO Dileep Ranjekar replied in the negative. 

"The trust will fund the philanthropic activities of the Foundation and not (for) any other purpose," Ranjekar said. 

The foundation, which was set up in 2001, works largely for the cause of education in rural India. 

"We believe that good education is crucial to building a just, equitable, humane and sustainable society. We want to contribute significantly towards improvement of education in India and through that, towards building a better society," Premji said. 

Premji, who is also Wipro founder, plans to set up the Azim Premji University , which is expected to start operations next year. The university will offer programmes and conduct research in the field of education and other related areas. 

"All our efforts, including the university that we are setting up, are focused on the underprivileged and disadvantaged sections of our society," Premji said. 

His industry peer and Infosys Chief Mentor N R Narayana Murthy offloaded 800,000 shares in the company earlier this year to set up venture capital firm Catamaran, with a corpus of Rs 174 crore. 

In June this year, HCL Corporation Chief Shiv Nadar sold a 2.5 per cent stake in HCL Technologies to raise over Rs 580 crore for charitable activities. 

Shares of Wipro closed at Rs 414.55 on the Bombay Stock Exchange on Wednesday, down 1.34 per cent from the previous close.

MOIL issue price fixed at Rs 375, listing likely on Dec 15

Source :ET:NEW DELHI:4 DEC, 2010, 07.14AM IST,PTI 


 State-run MOIL's issue price has been fixed at Rs 375 per share at which Rs 1,260 crore will be raised from IPO investors , and the company is likely to get listed on stock exchanges on December 15. 

"Each share of MOIL will be issued at Rs 375 and the company is likely to be listed on December 15," Finance Ministry sources told PTI, making the manganese miner the fifth PSU to divest stake this fiscal. 

The issue price of Rs 375 per share is at the upper end of the price band of Rs 340-375 fixed by the government. 

The public stake sale, which opened for subscription on November 26, was oversubscribed more than 56 times. By the end of the final day of the offer on December 1, it had attracted bids for 189.13 crore shares, though only 3.36 crore equities were up for grabs. 

At the issue price of Rs 375 per share, the IPO would raise about Rs 1,260 crore. 

The Centre is divesting a 10 per cent stake in the company under the IPO, while the state governments of Madhya Pradesh and Maharashtra will offload 5 per cent participating interest each. 

The price band was fixed by an Empowered Group of Ministers chaired by Finance Minister Pranab Mukherjee and attended by Home Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia. 

The government, which hopes to raise Rs 40,000 crore through PSU disinvestment this fiscal, has already mopped up close to Rs 20,000 crore through divestment in PSUs Satluj Jal Vidyut Nigam, Engineers India, Coal India and Power Grid.

UCO Bank to sell stressed assets

Source : BL :Priya Nair:Remya Nair:Mumbai, Nov. 30.2010

UCO Bank is planning to sell some of its stressed assets as part of its efforts to improve the asset quality.

“We are looking to sell Rs 280 crore of stressed assets. Within the next 10-15 days, we should be able to finalise one deal. We will sell more of these stressed assets so that we can reduce the portfolio,” said Mr Arun Kaul, Chairman and Managing Director of the bank.

The bank will look to sell at least one more tranche in the near future, he said.

“The NPAs are slightly on the higher side. Slippages are very large. For six months, slippages are nearly Rs 1,100 crore. Gross NPAs have gone above 2.3 per cent as on September-end. So we are making a lot of efforts to improve the quality of assets”, said Mr Kaul.

He said the bank is targeting to bring down gross NPAs below 2 per cent this fiscal.

In the second quarter, a large amount of the NPAs have come from the agriculture waiver and debt relief scheme. Over the next two quarters, there is unlikely to be any abnormal slippages, Mr Kaul said.

The bank has created a separate recovery vertical that will focus purely on recovery of bad loans.

“Ordinary branches have so many other functions that have to be done. So this function gets diluted. We have created separate 5-6 stressed asset branches which will focus on recovery of bad loans. These branches will report directly to the head office, thereby ensuring quick decisions are taken,” said Mr Kaul.

These branches will handle large NPA accounts for above Rs 1 crore or so. Besides the separate branches, the bank is also planning to set up recovery camps, lok adalats and engaging recovery agents. The bank has set an internal target of Rs 1,300-1,400 crore for recovery from bad loans.

UCO Bank is also setting up specialised branches for disbursing credit to large corporates to ensure that these do not become bad loans due to bad underwriting.

“NPA creation is partly due to the skill sets available in banks. So we are creating specialised branch known as flagship corporate credit known for large corporate credit”, he said. While for the retail segment, the bank is setting up the central processing units, for more efficient monitoring.

IOB cuts NPAs in Karnataka by Rs 200 cr in first half

— G.R.N. Somashekar 
 
Optimistic of recovery:Mr M Narendra (right), CMD, Indian Overseas Bank, and Mr Ranganath, GM, Bangalore Region, addressing a press conference in Bangalore on Friday.

Source :Business line Bureau:Bangalore, Dec 3.2010

Indian Overseas Bank has brought down its NPAs in Karnataka by about Rs 200 crore during the first half of this fiscal and it currently stands at around Rs 500 crore.

“We expect substantial recovery before March this year,” said Mr M Narendra, Chairman, Indian Overseas Bank.

Tourism projects

Addressing a press conference here, he saidthe bank's exposure to the real estate sector was around Rs 400 crore. “Recovery in this sector has been slow because of the recession and we are confident that we would be able step up the recovery soon,” he said.

Advances to real estate and housing sector in the state areabout Rs 240 crore as of September 30, 2010.

Participation in the State tourism projects, SEZs and infrastructure projects will be the focus for the Chennai-based bank during the year.

Mr Narendra said the bank was ‘interested' in participating in infrastructure projects such as steel, cement and power in the State. “We also want to tap the sugar belt in the state by opening branches in Belgaum and Bagalkot and industrial areas like Jigani and Bidadi,” he said.

Deposits, advances

The banks' total deposits in the State stand at Rs 5830 crore and advances at Rs 3153 crore. Priority sector advance is around Rs 624 crore and agricultural advances about Rs 249 crore. IOB has 83 branches and 41 ATMs in Karnataka.

The bank which has an employee pool of around 26,000 people plans to recruit about 1600 people (1100 clerks and 500 specialist officers) during the current year and about 100 new hires would be in the state, Mr Narendra said.

SBI chief wants overseas HQ for international biz

Source:Business Line :N K Kurup:Priya Nair:Mumbai, Dec. 2:2010

Mr O. P.Bhatt, Chairman, State Bank of India, wants to move the headquarters of the bank's international business outside India and also induct people of international eminence on SBI's board. This is part of the bank's larger strategy to become India's multinational bank.

“Though we have the largest international footprint (among Indian banks), we are not an international bank in many ways,” Mr Bhatt told Business Line.

“We are looking at it not only in terms of our balance-sheet, but for our ability to help in a cross country environment. We want to provide Indian corporates the entire gamut of services for their overseas business — whether it is raising bonds or money, advising and mergers and acquisitions,” he said.

Currently, overseas operations contribute to 12-15 per cent of the bank's profits and the aim is to increase it to 25 per cent over three-four years.

SBI currently, has 150 offices outside India. It is in the process of setting up regional structures or hubs across the world, each of which would be responsible for the administration and other operations of a certain geographical area. 

The overseas branches then would not need to report to the Chief General Manager in charge of international operations in India. 

There would be six-seven such hubs, including in New York, London, Frankfurt, Hong Kong, and Dubai. Dhaka will have a separate country head.

I-T dept introduces new number for taxpayers for tax filing

Source :NEW DELHI:29 NOV, 2010, 08.40AM IST,PTI 

Taxpayers will now have to procure a 'new number' for filing returns and making any communication with the Income Tax department. 

The unique Document identification number (DIN), on the lines of numbers like PAN and TAN, will be quoted on "every" income tax-related communication, including returns to be filed next year for the financial year 2010-11. 

According to the new guidelines brought out by the Central Board of Direct Taxes (CBDT), the DIN will be mandatory "in respect of every notice, order, letter or any correspondence" with the department, by the taxpayers. 
"The DIN will be generated by the I-T department and will be useful, essentially, for error-free filing of tax returns, claiming refunds and other communication with the department by the assesses," a senior Finance Ministry official said. 

The 'Aykar Sampark Kendras' will hand out the DIN from this month, the official said. 

Assesses will not be put to any trouble, as the numbers will be generated and allotted by the department itself. 

I-T officials will also be allotted the numbers in order to streamline the process, the official said, adding, the number has to be produced thereon for every activity with the department. 

Taxpayers and tax collectors are currently required to quote Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) among others when returns are filed with the department. 

According to section 282B of the Income Tax Act that deals with DIN, if the document sent to the tax authority does not bear this unique computer-generated number then "such document, letter or any correspondence shall be treated as invalid and shall be deemed never to have been received." 

DIN is aimed at bringing more transparency in tax administration as the whole exercise involves a number of documents and proformas.


 Apart from regular filing of taxes, a taxpayer deals with the department for various other financial services, which DIN will help to ease, the official said.