Licence waiver sought for e-commerce services
Amara Raja probe heat on brokers
Panel wants more powers for RBI over co-op banks
Imports from Nepal threaten Darjeeling tea
HDFC gets ADB loan

New Delhi, July 7: 
Information, communications and telecom (ICT)-based value-added services like e-commerce, tele-medicine and tele-teaching may be allowed without a licence.

Union minister for parliamentary affairs and information technology Pramod Mahajan has urged finance minister Yashwant Sinha not to impose a licence for such value-added services. In a letter to the finance minister, Mahajan has requested “that the services which are not presently licensed should not be brought under the purview of licensing.”

Mahajan has pointed out that the penetration of ICT in the country is low and all efforts are being made to increase the penetration.

“Subjecting value added services to any form of licensing will adversely affect the promotion and penetration of ICT, employment, business opportunities and investment in the country,” said Mahajan.

“The investors will offer the value-added services in the country from infrastructure set up outside the country. Licensing of the value added services shall only stifle growth and innovation amongst the Indian people and entrepreneurs,” he added.

The review committee on convergence consisting of secretaries of various ministries headed by Fali. S. Nariman took up the issue at its meeting held today.

The convergence Bill seeks to frame rules and regulations which will help in development of the communications sector in a competitive environment, making available communication services at affordable cost to all uncovered areas including rural and remote areas, developing a modern and effective communication infrastructure in the converged environment, promoting a level playing field for all operators, protecting consumer interests, enforcing universal service obligations (USO).

The draft Bill is scheduled to be discussed on Wednesday. The Bill was recently finalised by the Ministerial level Group on Telecom and IT Convergence.


Mumbai, July 7: 
The Securities and Exchange Board of India (Sebi) is to initiate an inquiry against 31 brokers allegedly involved in manipulating Amara Raja Batteries scrip. “We have completed investigation into the price rigging charges in Amara Raja stock and will now appoint an enquiry officer,” Sebi sources today said.

Sebi had ordered a probe in March into the abnormal price movement in this scrip and sought trading information from BSE and NSE. The price of Amara Raja had shown volatility with value taking a plunge from Rs 317.55 per share on March 8 to Rs 84.80 on March 20 on NSE.

Asked about the prosecution of brokers involved in manipulation, sources said “due process of law will be followed”. Sebi was examining prosecution of alleged manipulators, Harinarin Bajaj and his son Rahul Bajaj.


Calcutta, July 7: 
The Joint Parliamentary Committee, probing the recent stock market scam, favours a free-hand for the Reserve Bank of India (RBI) in its role as regulator of co-operative banks. The recommendation, if accepted, will come as a shot in the arm of the central bank, which has been seeking greater powers over co-operative banks for a long time now.

Co-operative banks have come under the JPC scanner following revelations that several of them connived with Mumbai-based broker Ketan Parekh, prime accused in the stock market scam. This, in turn, has brought the central bank’s regulatory role in for scrutiny.

A large number of banks reportedly acted in collusion with the tainted broker, lending way beyond the stipulated limits, particularly the Madhavpura Mercantile Co-operative Bank (MMCB) which lent Rs 798.44 crore to various Parekh group entities, as against a sanctioned limit of Rs 205 crore.

Speaking to The Telegraph, a senior JPC member said, “We feel the banking operations of co-operative banks should be regulated by the RBI, sans any interference from the state governments. In other words, the RBI should henceforth be held fully responsible for monitoring the banks’ operations.”

In its preliminary report to the JPC, the Securities and Exchange Board of India (Sebi) observed that MMCB had lent about Rs 200 crore to Mukesh Babu Securities, a firm close to Parekh.

The RBI, in its response to the panel’s queries on its failure to effectively monitor the errant banks, particularly MMCB, had cited the absence of a clear demarcation of the regulatory functions between the bank and state governments as being responsible for the mess.

The JPC member said discussing the issue, the 30-member committee felt that a model law for all states, clearly demarcating the regulatory functions of the RBI and state governments regarding co-operative banks, should be laid down.

Not just the co-operative banks alone, but their private sector brethren have also taken a drubbing. The Big Bull pocketed about Rs 256 crore from Global Trust Bank by way of loans and overdraft facilities, the Sebi report says, adding that Parekh and his associates got another Rs 65 crore from Bank of Punjab, Centurion Bank and ICICI Bank.

“In the 1992 scam, it was the public sector banks which were largely affected. Things do not appear to have changed much, except that the private banks have taken the hit this time,” the JPC member observed.


Calcutta, July 7: 
The delay in giving the trade mark certification and geographical identification of Darjeeling tea legal force has exposed the local industry to threats from Nepalese imports.

Tea produced in the Himalayan Kingdom has emerged as a major rival to Darjeeling tea, and is attracting foreign buyers, mostly the Germans, because it is sold at cheaper rates.

The result is that prices of the first and second-flush Darjeeling tea have tumbled to Rs 300-500 a kg. “There are hardly one or two invoices which cross the Rs 600-mark,” said R.K. Dixit, chairman of Darjeeling Planters’ Association (DPA).

Nepalese producers are using latest clones of Darjeeling tea and selling them at half the price of the original variety. German buyers have shown interest in investing in Nepalese tea gardens to increase the current production of one million kgs. Even a few Darjeeling producers are believed to be buying from Nepal and passing it off as their own production.

A section of DPA is of the opinion that Nepalese tea should be allowed to participate in the Calcutta auctions to ensure that producers from both countries get a level playing field.

The proposal has been sent to the Tea Board. “The matter is currently being examined,” senior board officials said. The Nepalese producers have already made a presentation to the Tea Board on selling teas in the Calcutta auctions.

“If we allow the Nepalese tea to be auctioned at our centres, countries like Kenya, Indonesia will also try to do the same. Then, what will happen to our own production?” Dixit said

Though the current production of Nepalese tea is only a million kg compared with 10 million kgs of the Darjeeling variety, industry feels the production will go up substantially in the coming years. Of the total production of 10 million kgs, 60 per cent are rains teas, whose prices much lower than the cost of production. The premium 40 per cent tea gives the industry the bulk of revenues. “It is this portion which is now facing severe competition from Nepal tea,” Dixit said.

The DPA chairman stressed the need for a legalising certification of trade mark and geographical identification of Darjeeling tea. “Unless that is done, it will be difficult for the Darjeeling tea to survive in the long run.” The industry will raise the matter with Union commerce and finance ministers soon.


Calcutta, July 7: 
HDFC has drawn a new line of credit from Asian Development Bank (ADB) to boost its housing finance activities. ADB has approved a loan of $ 80 million to HDFC under the housing finance facility-II project. The loan is for a period of 25 years, including a moratorium of five years. HDFC will commence draw down of this loan only after finalising a suitable risk management arrangement.

HDFC has availed foreign currency borrowings of $ 250 million from the International Bank of Reconstruction and Development, $ 40 million from International Finance Corporation and $ 125 million from the United States Agency for International Development. “HDFC, being a cautious player always arranges risk management so that it does not suffer from any exchange fluctuations,” a senior official said. HDFC is protected from the foreign exchange fluctuations in respect of all its foreign currency borrowings totalling $ 427.97 million through back-to-back and risk management arrangements.


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