LIC banks on banking foray for growth
Nalco weighs joint ventures abroad
Hudco cuts rates
Big houses sign new excise audit protocol
Business briefs

Mumbai, May 6 
While banks and financial institutions are almost ready for their insurance splash, Life Insurance Corporation is planning to take the reverse route and foray into banking.

Confirming this, LIC chairman, G. Krishnamurthy said, “We find a lot of synergy between insurance and banking.”

According to him, common attributes like “expertise in investments” and LIC’s need for a “suitable and efficient channel for transfer of funds” have prompted this thinking.

“However, the plan is still at an embryonic stage,” he clarified. LIC will take a decision after Booz Allen Hamilton, its management consultant,comes up with its report.

The agency has been hired to draw up a comprehensive blueprint on future strategies of the corporation. The international firm will study the entire gamut of operations in the light of deregulation in the insurance sector.

In addition to this, the insurance major has hastened plans to finance projects on its own instead of the current practice of partnering financial institutions like IDBI, ICICI and IFCI. Earlier, the insurance major used to participate in consortium financing with the FIs acting as lead institutions. However, the chairman clarified that the corporation would continue to take part in consortium financing with other development financial institutions and FIs.

LIC has also approached several banks with a proposal to tie up for distributing its insurance products.

“We are talking to a few banks for finalising the tieup.” he said. They will act as corporate agencies. The new IRDA regulations allowed banks to act as corporate agencies and we would benefit enormously in view of their wide branch network, he added.

The corporation has also beefed up its project appraisal cell. Last year, LIC had appraised 111 projects with assistance for 28 projects being sanctioned. The amount sanctioned is to the tune of Rs 1112.33 crore.

The insurance major is also turning aggressive in the secondary market. The corporation invested nearly Rs 3812 crore for the year ended March 31, 2000 as against Rs 2124 crore in the previous year.

Krishnamurthy said equity investments paid off with the insurance major making profits to the tune of Rs 900 crore last year as against an average return of Rs 200-300 crore in previous years.

The pay-off has encouraged the insurance major to increase its equity exposure to 10 per cent from its existing level of 6 to 7 per cent.

The year also saw LIC reducing bonuses on short-term policies while at the same time increasing bonuses on long-term policies. He explained the move by saying the corporation acted in this manner to encourage individuals to go in for policies with longer maturities.

The corporation has plans to introduce two-or-three new products in the coming months. However, he refused to give details as the proposals were before the IRDA for approval.    

Bhubaneswar, May 6 
National Aluminium Company Ltd (Nalco) is toying with the idea of setting up joint ventures abroad if it gets electricity at cheap rate.

This is part of the vision document that the public sector aluminium major is preparing for the company’s growth over the next two decades. The vision document will be released in August, according to Nalco chairman P. Parvathisem.

Speaking to reporters here today, Parvathisem said the company planned to set up joint ventures in foreign countries where cheap power would be available easily.

Aluminium is a power-intensive industry and cheap electricity could give the company competitive edge in international market.

The Nalco chairman said his company was not considering any proposal to take over Bharat Aluminium Company (Balco).

He said he heard that a parliamentary standing committee had suggested that Nalco should take over Balco which was facing a staggering financial deficit.

“But we have not received the report or the recommendations,” the Nalco chief said.

The first phase expansion of Nalco’s Damanjodi refinery is near completion. The production of alumina will go up from 8,00,000 tpa to 10,50,000 tpa when the expanded refinery is commissioned next month.

Parvathisem said the company had doubled its bauxite excavation and transportation capacity to meet the bauxite requirement for the expanded refinery. Nalco’s captive port facilities in Visakhapatnam, which handles the bulk import of input materials and export of alumina, was also being upgraded to deal with increased import and export.

With the enhanced capacity, the chairman said, Nalco would become Asia’s largest alumina producer with an exportable surplus of one million tonnes per annum even after meeting its smelter plant’s demands.

He said the company was trying to save Rs 300 crore on its Rs 1665 crore expansion programme, using cost-effective methods.

Parvathisem said the expansion of its smelter plant would be completed by May 2002, increasing its capacity from 2,30,000 tpa to 3,45,000 tpa.

He defended Nalco’s decision to take over International Aluminium Products Ltd (IAPL), which had drawn flak from the Janata Dal. He said the export-oriented unit would give Nalco an edge in the commercial durable and packaging industries.

Located close to Nalco’s smelter unit in Angul, IAPL would start its commercial production by March 2001.

The Nalco chief said he had an “informal” discussion with the Andhra Pradesh government on exploiting huge bauxite deposit in that state. However, no final decision has yet been taken.

Nalco reported a turnover of Rs 2142.35 crore last year, a hefty 42 per cent rise over previous year’s figure. The company registered a net profit of Rs 512.10 crore.    

New Delhi, May 6 
Hudco today brought down interest rates for Hudco Niwas loans between Rs 2 lakh and Rs 50 lakh from 13.5 per cent per annum to 13 per cent. Rates for two other slabs, up to Rs 50,000 and Rs 50,001 to Rs 2 lakh, have not been reduced.

It also reduced interest rates on loans for purchase of plot from public agencies to 13 per cent from 13.5 per cent. Interest on loans between Rs 1 lakh and Rs 8 lakh for extending or improving existing house has also been reduced by 50 basis points to 13 per cent.    

Calcutta, May 6 
The Central Board of Excise and Customs has signed a new audit protocol with top companies—Hindustan Lever, Larsen & Toubro, MRF, Tisco, Maruti, Indian Oil , SAIL, HPCL— under the mandatory Excise Audit (EA) 2000 order.

The new audit agreement has been signed for a period of three to five years covering 31 factories/ establishments of these companies which pay the highest incidence of excise duties in the country. The EA 200 is mandatory for all companies paying an excise of more than Rs 5 crore.

Responding to questions of companies at a meeting at the Bengal Chamber of Commerce and Industry, CBEC chairman S.D.Mohile clarified that there was no across the board modvat benefit available on inputs to manufacture goods under the special excise duty structure introduced in this year’s budget. The government would give such clearances on a case to case basis.

Till now there has been confusion over whether the inputs for manufactured goods will continue to be modvatable.    

Dip in forex reserves

Mumbai, May 6: India’s foreign currency reserves declined by $ 247 million to $ 37,975 million for the week ending April 28 compared with the previous week, recording a fall for the second consecutive week. The reserves had fallen by $119 million in the week ended April 21 to $ 38,222 million. The decline in reserves was solely due to the $ 247 million fall in foreign currency assets to $ 34,993 million, for the week ended April 28.

Love bug

New Delhi, May 6: Even as the world gets infected by the I Love You and Joke viruses, Indian companies are heaving a sigh of relief. Experts feel the failure of these viruses is because of the low e-mail usage in the country as well as increased use of cheap, advanced anti virus software developed locally.    


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