Elbow-room for banks
United Bank to shut down four regional offices
Govt targets rural areas to extend LPG reach
Videocon unit to export TV parts
Oberoi group winds up Gourmet Club
Bengal inks pact with Gail
Helpline for power utilities

Mumbai, June 23: 
The Reserve Bank of India (RBI) has asked public sector banks to go ahead with the practice of annexing the balancesheets and profit and loss accounts of their subsidiaries to their own balancesheets even if an audit by the Comptroller & Auditor General ( CAG) of such subsidiaries is due.

This clarification comes following a confusion over the provisions of the Companies Act 1956 which stipulate that such subsidiaries can publish their balancesheets only after the completion of audit by the CAG.

Earlier this year, RBI, through a notification, made it mandatory for banks, to annex the balancesheet, profit and loss account, report of the board of directors and the report of the auditors in respect of each of their subsidiaries to their own balancesheets. The practice is supposed to begin from the year ending March 2001.

But many banks found the provisions of the Companies Act coming in the way of implementation of the RBI diktat. These banks had represented to the RBI that the CAG audit of the subsidiaries may not be completed before the finalisation of the parent bank’s accounts.

Following such a representation, the central bank has clarified that in cases where the balancesheets of subsidiaries for the year 2000-2001 are not published for want of completion of CAG audit, banks may annex the balancesheet of these subsidiaries to their own balancesheet as on March 31, 2001, with a note that the accounts are subject to CAG Audit.

According to the RBI regulations, the parent bank should annex only the annual accounts and auditors’ report of the subsidiaries to its balancesheet while the directors’ report in respect of the subsidiaries should be made available on the website of the parent bank and may be made available by the parent bank, on request, to those who desire to have them.

The RBI had earlier told banks that this procedure should be continued till such time the bank switched over to the consolidated balancesheet system.

The accounting year of the entities which are banking subsidiaries should normally be co-terminus with that of the parent bank and hence the date of the annual accounts of such subsidiaries, annexed to the parent’s balancesheet, should coincide with the date of annual accounts of the parent, it added.

In respect of subsidiaries which may have an accounting year different from that of the parent bank, the annual accounts annexed should not relate to a date earlier than six months prior to the date of the annual accounts of the parent bank, RBI said.

Banks are also required to voluntarily factor in risk weighted components of their subsidiaries into their own balancesheet on notional basis and earmark additional capital in their books, in stages, beginning from the year ending March 2001.


Calcutta, June 23: 
The city-based United Bank of India, which has posted a net profit of Rs 19.14 crore in the 2000-01 fiscal, will close down four regional offices in the current financial year to reduce operational costs.

Out of the 32 regional offices, those will be which will be closed are — Calcutta, Howrah, Purbachal (Manipur) and Katihar (Bihar).

The bank has also decided to merge 50 branches, of which 20 are in West Bengal. Five branches in the state have already been merged.

In 2000-01, the total business of the bank crossed the Rs 25,000 crore mark. This would have been higher but for the additional charge of Rs 67 crore towards staff-related expenditure, on account of the voluntary retirement scheme and pay revision.

The bank has accepted the VRS applications of 2,500 employees, out of which 2,067 have already been released.

The bank has made a total provisioning of Rs 117 crore in 2000-01.

Addressing a press conference here today, G. Sundaravadivel, executive director of the bank said, “In the current financial year our aim is to achieve a business of Rs 30,000 crore. Out of the excess Rs 5,000 crore business, Rs 2000 crore will come from the advances and Rs 3,000 crore from deposit growth.”

The operating profit of the bank has increased by 62.2 per cent to Rs 136.72 crore as against Rs 84.29 crore in the previous year.

The bank’s capital adequacy ratio (CAR) rose to 10.44 per cent, as against the stipulated level of 9 per cent, which it achieved by raising tier-II capital, by floating bonds of Rs 140 crore.

The bank, labelled a weak bank, had sought a Rs 200 crore recapitalisation fund from the government last year to maintain the capital adequacy ratio. However, the government did not release any funds, leaving the bank with no other choice but to raise the tier-II capital to maintain the CAR.

The deposits increased by 10.1 per cent to Rs 18,477 crore. The gross advances of the bank increased by 19.2 per cent to Rs 6,560 crore. The total investments of the bank increased by 12.2 per cent to Rs 11,399 crore.

The net non-performing asset ratio of the bank has come down to 10.5 per cent as against 12.7 per cent in the last year after a net recovery of Rs 263 crore.


Calcutta, June 23: 
The petroleum ministry has decided to focus on rural marketing of liquefied petroleum gas (LPG) and will set up 1,200 distributorships in the current year.

Ram Naik, Union minister of petroleum and natural gas, who was in the city today to address members of the Bengal Chamber of Commerce and Industry, said that earlier, in some states, people had to wait more than seven years for an LPG connection, but today the situation has improved. “Now we are focusing on increasing the reach of LPG in the rural areas.”

Last year, the government released 1.27 crore LPG connections. Regarding Bengal, Naik said the state’s total LPG customers stood at 20.1 lakh, of which 6.28 lakh connections were released in the year 2000. Further, about 80,000 connections have been released till May 2001.

“We have proposed to set up 113 new LPG distributorships, 72 retail outlets and 13 kerosene dealerships in the state. Two dealer section boards have been set up for this purpose at Calcutta and Siliguri. At present, there are 352 LPG distributorships in the state and addition of more will increase the strength by 30 per cent,” Naik said.

Moreover, he said the government will soon come up with regulations that will enable car owners to run their vehicles on LPG.

The petroleum ministry is focussing on possible production of gas from non-conventional gas resources and the first coal bed methane (CBM) bidding round has been announced. Under this bidding round, one block is being offered in the Raniganj coalfield.

Naik said though Bengal has witnessed offshore and onshore exploration by foreign and Indian companies for many decades, but commercial hydrocarbon discovery is yet to be made. However, under the new exploration licensing policy (NELP), the thrust will be on intensifying exploration in the country, including in the state.

Under the NELP-I round, a large block of Bengal offshore has been awarded to GAIL and Gazprom of Russia. Similarly under NELP-II, one offshore block and another onshore block in the state have been awarded to Oil and Natural Gas Corporation and Indian Oil Corporation.

The minister said though the administered price mechanism (APM) would be dismantled by March 31, 2002, the government has taken a policy decision to maintain the subsidies at 33.3 per cent on kerosene and 15 per cent on domestic LPG for the weaker sections of the society.

“In order to ensure that oil market develops in an appropriate manner and attains stability, a proper regulatory framework has to be set in motion. Work in this direction is under way,” Naik further added.


New Delhi, June 23: 
Videocon India has set up a Rs 500 crore unit in Bangalore to manufacture components for colour televisions and refrigerators which will be exported to Europe.

The Rs 4,000-crore television and white goods maker aims to assemble the finished products at a facility in Italy and take advantage of the European tax structure which will enable it to market them at competitive prices. The finished products will be marketed under the brandnames that Videocon already uses in India—Akai, Sansui and Toshiba.

The manufacturing unit in Bangalore, which became operational last month, will churn out components for half a million colour televisions and same number of refrigerators.

Videocon chairman Venugopal Dhoot said, “We can easily cut down the costs, unlike our competitors, because we make all the components required to produce colour televisions and refrigerators.”

“Since we export the components and assemble the product in Italy, we are getting the benefit of the European tax structure. That has given us a competitive edge in the foreign markets,” Dhoot said.

Until now, Videocon used to source the compressors and motors for refrigerators from Necci Compressori SpA of Italy. Videocon has now started manufacturing these components for foreign market also.

The company also has its own glass shell manufacturing unit that currently manufactures six million computers. The company is set to double the capacity for PC manufacture by the end of this year.

“Our strategy of multi-branding our products in the local market has paid off as we have been able to increase our market share. Currently, we have more than 20 per cent of the CTV market and 18 per cent of the refrigerator market. But it is the washing machine segment with the Videocon brand name where we enjoy the maximum market share of 50 per cent.”


New Delhi, June 23: 
Gourmet Club, the Oberoi group’s loyalty programme, is being wound up.

The hotel major decided to pull the plug on the programme after it determined that it did not fit in with its overall business plan. New membership has been stopped and the scheme will finally be phased out when the Gourmet Card of the last of its 14,000 members expires.

The scheme was launched four years ago in Delhi, Mumbai, Calcutta, Bangalore, Hyderabad and Colombo. But by 1998, the scheme was restricted to only the first four cities.

For the foodies, this is bad news. Membership (which was based on invitation) cost Rs 6500 per annum, but it came with a bagful of lollies: there was a 50 per cent discount if two people were dining, based on the premise that the member dines free. For three people, there was a discount of 33 per cent. Other privileges included a 15 per cent discount at the beauty salon, florist and barber shop, and a 50 per cent discount at metro city hotels over weekends.

Since the membership is annual, the existing members will enjoy the facilities as long as their cards are valid after which there will be no renewal. The company says the programme was popular and profitable, but its closure indicates that it was either not viable or did not produce the desired results.

On the other hand, another loyalty programme of the Oberoi Group, which began eight years back, is still up and running. The scheme is designed to reward the regular users of the group’s hotels.

Membership of Top comes for a nominal fee of Rs 575 and the member earns reward points for the use of facilities at any of the group’s hotels in India and Sri Lanka. Points can be redeemed in the form of gifts, hotel stay or restaurant vouchers. The membership base of Top is 10,000 today, contributing nearly Rs 70 crore towards the group’s revenues.

The Ashoka group of hotels runs a loyalty program called the ‘platinum card’. For an annual premium of Rs 4500, the member is entitled to two nights stay free with breakfast. At Rs 9000 a room night, it amounts to Rs 19,000 (stay on the Club Floor) in total, including breakfast, says Jawahar Ghadiok, general manager of Ashok Hotel, Delhi. Ashok is part of the ITDC group which is in the process of disinvestment.

For foodies, the platinum card offers dinner free for one when two are dining. Discounts at 33 per cent, 25 per cent and 20 per cent are given respectively when groups of three, four or five people dine.

It also offers a 30 per cent discount on published tariffs. However, the room discount is being given at four select five-star hotels of the group and the food discount only at the restaurants of Ashok Hotel in Delhi.


Calcutta, June 23: 
Gas Authority of India Limited (Gail) and the West Bengal Industrial Development Corporation (WBIDC) today signed a gas co-operation agreement for developing a gas pipeline network and marketing natural gas in West Bengal.

The agreement was signed by Somnath Chatterjee, chairman of WBIDC and J. K. Jain, chairman and managing director of GAIL.

Under the agreement, a joint working group will be set up to aggregate the potential gas demand and develop gas supply infrastructure in the state.

The joint working group will monitor the progress of the feasibility study and examine various gas supply options like coal gas, natural gas-based methane, compressed natural gas and import of gas through pipelines for the state.

“With the signing of this agreement, a new priority has been accorded to the supply and distribution of natural gas in the state,” said chief minister Buddhadeb Bhattacharjee.

GAIL will use its understanding of the Indian gas market and end-users, as well as technical and commercial expertise to study the gas demand potential of the state. It will also develop infrastructure for gas pipelines.


New Delhi, June 23: 
The Power Finance Corporation and National Productivity Council (NPC) have signed a memorandum of understanding to offer advisory services to state-owned power utilities as well as private sector entities in the power sector.

Under the three-year agreement, NPC would offer consultancy services in the power and financial sector. It would also offer techno-managerial consultancy, human resource development, specific studies, join-venture formations and initiatives through consultancy to support reform and restructure the power sector.

The terms and conditions between the two organisations to undertake the consultancy and other services will be finalised by month end, officials said.

“NPC and PFC would nominate key executives from both organisation to form an assignment team, which would formulate the strategies for effective functioning of the team,”said sources in PFC.


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