Govt hints at sops for 3 weak banks
Leather complex keeps date with court diktat
Exide net profit dips 43% to Rs 6.7 cr
FIEO plans to launch portal

 
 
GOVT HINTS AT SOPS FOR 3 WEAK BANKS 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 20: 
The three weak banks—Uco Bank, United Bank of India and Indian Bank—can look forward to some good news next week.

Such a hint was dropped by none other than Union minister of state for finance B.V. Patil who said the much-awaited report of the Talwar Committee on restructuring of weak banks will be submitted to the government next week.

The report will have recommendations to strengthen these three banks, he said.

It is widely felt that the report would pave the way for these banks to get the much-needed recapitalisation funds to maintain their capital adequacy ratio.

Patil, who was in the city to attend the golden jubilee function of UBI, said “The government is in favour of strengthening and running these banks. The government may declare separate packages for these banks or may declare a single package for all the banks. The packages will help these banks to stand on their own feet.”

The three banks had submitted separate packages to the finance ministry that mainly focussed on provision of funds for recapitalisation, voluntary retirement scheme (VRS) and technology upgradation.

Commenting on the government’s move to provide funds to the banking industry on VRS account, Patil categorically said no financial support will be provided to the banks.

“Only weak banks will be given some financial support for VRS since it forms a part of their restructuring package. For other banks, the government has taken a conscious decision not to provide any financial help.”

On whether the entire provisioning on account of VRS will be done in 2000-2001 accounts, the Union minister said the matter is being looked into.

On the controversial Bill that seeks to lower government stake in banks from 51 per cent to 33 per cent, Patil said, “We are hoping to pass the Bill in the next budget session. We have to carry on with the reforms process.”

Union minister of state for external affairs Ajit Panja, who was also present at the function, said, “Banks have to take a holistic approach in the current scenario.”

Biswajit Choudhuri, chairman and managing director of United Bank of India, said artificial parameters like prudential norms, income recognition norms have rendered them weak.

The April-December figures, which were released by the bank today, show that the operating profit has improved to Rs 91 crore from Rs 24 crore earned during the corresponding period of last year. Deposits at the end of December have increased to nearly Rs 18,200 crore.

   

 
 
LEATHER COMPLEX KEEPS DATE WITH COURT DIKTAT 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 20: 
The much-awaited Calcutta Leather Complex became operational today with Jagmohan Dalmiya, former ICC chief, informally handing over land papers to 39 allottees for relocation of tanneries as also setting up of new ones.

However, the Rs 300-crore complex, set up to meet the Supreme Court’s deadline for shifting 586 tanneries in Tangra, Topsia and Tiljala areas, is only partially operational, with certain basic facilities including a central effluent treatment plant (CETP) yet to be set up.

“We are happy that we have been able to meet the first deadline stipulated by the Supreme Court,” Dalmiya, the chairman of the implementing company, M L Dalmiya and Co Ltd, said. He, however, admitted the CETP would take at least two more years to become fully operational despite the fact that the Supreme Court had ordered relocation of tanneries on the outskirts of the city with proper pollution control devices.

Apart from the absence of several facilities at the complex, the allottees and other prospective entrepreneurs were still groping in the dark about their legal status and charges for common facilities. In fact, a number of allottees handed over protest letters to Dalmiya as the draft of the deed was ambiguous on whether they would get perpetual rights over the lease. Nevertheless, similar allotment functions have already been lined up for the next six months.

The West Bengal government had offered M. L. Dalmiya & Co a build-own-transfer (BOT) contract for developing a 1100 acre land 15 km off the Eastern Bypass at Karaidanga, South 24 Parganas.

Zone 1 will see the relocation of 34 existing units at Tangra, while 19 entrepreneurs have bought land to set up new tanneries. Under a cross-subsidisation policy, land to the relocating units is being sold at Rs 600 per square metre while new entrepreneurs are being charged Rs 1700.

   

 
 
EXIDE NET PROFIT DIPS 43% TO RS 6.7 CR 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 20: 
Exide Industries posted a net profit of Rs 6.67 crore during the third quarter of 2000-01, a decline of 43.33 per cent compared with Rs 11.77 crore in the corresponding quarter of 1999-2000.

Profit before tax has shown a decline of 10 per cent in the third quarter to Rs 32.43 crore as against Rs 35.88 crore registered in the corresponding period of the previous year, owing to a higher depreciation of Rs 31.83 crore compared with Rs 29.56 crore last year.

The gross sales at Rs 656 crore showed a marginal decline of 1.5 per cent from the comparable figure of Rs 669 crore recorded in the earlier year. Operating profit at Rs 103.20 crore was a shade below the Rs 104.50 crore recorded in the earlier year, as was gross profit at Rs 64.26 crore, as against Rs 65.44 crore achieved last year.

“The company has performed well under very difficult market conditions. However, we still expect to end the year with a modest growth, even amidst the general economic slowdown,” said S. B. Ganguly, chairman Exide Industries.

Despite a sharp deceleration of about 24 per cent in the tractor and HCV market and the car market recording a negative growth, the automotive battery division has performed well with a growth of four per cent. The growth has come mainly from the replacement market and exports, which have grown by a significant 80 per cent.

The third quarter results do not include sale of submarine batteries amounting to Rs 87 crore. The order was delayed and has just been received. Exports of industrial batteries to South East and European markets maintained their growth.

However, the industrial battery division which has the infrastructure sector as its main customer has been badly affected. Railway orders for the earlier year’s tenders have yet to be finalised.

Further, the opening up of automotive battery imports has seen the entry of large-scale imports from China, Korea and Malaysia. The Indian Battery Manufacturers Association (IBMA) has appealed to the government to reduce the skewed customs duty on lead imports to allow domestic manufacturers a level playing field. Urgent action is required to ensure that the faulty tariffs do not injure domestic manufacturers, Ganguly said.

Nirma net dips 15%

Nirma Ltd today recorded a 15 per cent drop in its net profit at Rs 64.8 crore during the third quarter ended December, 2000, as compared with Rs 76.3 crore in the same period last year.

During the period the company’s gross turnover touched Rs 626.6 crore, up 49.4 per cent from Rs 419.3 crore in the third quarter of last year, a company statement said.

Nirma’s net sales for the quarter was Rs 524.3 crore as against Rs 359.5 crore in the previous corresponding period.

“The company does not have any capex plan as of now and therefore, additional cash accruals are being utilised in the repayment of debt,” it said.

The company’s net profit for the nine month period ending December was up five per cent at Rs 201.4 crore, from Rs 191.7 crore in the previous year.

Gross turnover for the period was Rs 1838.1 crore, against Rs 1243.9 crore in the previous year.

Nirma’s earnings per share (annualised) at the end of the third quarter, on an equity share capital enlarged during June 2000, stood at Rs 33.8, increase by five per cent over fully diluted EPS of Rs 32.2 for the previous year.

J and K Bank net soars 37%

The board of directors of Jammu & Kashmir Bank today has taken on record the working results for the quarter ended December 31 2000. The bank posted a net profit of Rs 124.39 crore as against Rs 91.10 crore in the previous corresponding period, registering an increase of 37 per cent.

   

 
 
FIEO PLANS TO LAUNCH PORTAL 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 20: 
The Federation of Indian Export Organisations ( FIEO) plans to launch a portal to facilitate business transactions by small and medium-scale exporters.

In a bid to double exports in five years from the current level of $ 37 billion, FIEO will also facilitate interaction with Indian trade missions abroad to obtain market-specific information and help exporters home back home to zero in directly on the buyers and meet their requirements without loss of time.

Explaining FIEO’s action plan, president K. K. Jalan noted that the organisation would focus on promoting exports from the remotest rural areas of the country by setting up special cells to encourage small, tiny and cottage industries in the less developed areas of the north-eastern region, Jammu and Kashmir, Jharkhand, Uttaranchal and Chattishgarh so as to bring the smallest of the units into export business.

   
 

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