Insurance bonanza for SBI account holders
IDBI gives itself one year to turn universal
HLL to shift Diversey Lever to US firm
Bhusan Steel to invest Rs 2800 cr in Durgapur
Leeway for nidhi firms
Pepsi bubbles with break-even hopes
Casio set to launch new-age mobile
Bata takes first step to recast operations
Maharashtra austerity drive
Foreign Exchange, Bullion, Stock Indices

Mumbai, March 22: 
The account holders of State Bank of India and its associate banks may soon get an unexpected gift from an unexpected corner: SBI Life Insurance, a joint venture between SBI and Cardiff SA of France, is planning to offer life cover to them by way of a group insurance plan.

The move is expected to provide a boost to the insurance venture as SBI has a network of over 9000 branches across the country with around 80 million account holders. The scheme will be rolled out gradually, with only the branches in the metros being covered first.

�Super Suraksha�, the group insurance scheme that will be offered to SBI account holders, was initially made available only to term deposit holders. Gauging the response, the life insurance company is now planning to extend the offer to SBI account holders as well.

The only eligibility criteria is that the account holder should be with the bank for a minimum one year, R Krishnamurthy, managing director & CEO of SBI Life told The Telegraph in an interview. By virtue of being a group insurance scheme, the account holder need to pay a premium of only Rs 50 per month for a life cover of Rs 1 lakh.

SBI Life has already made a start by offering this group insurance scheme to three branches in the metropolis. In Calcutta, four SBI branches are being earmarked in the first round, Krishnamurthy said. �Our endeavour would be to provide this facility in 60 SBI branches in the first phase,� he said. �It is essential that the branches have a fully computerised network,� he said.

�The logistics involved is enormous,� Krishnamurthy said, adding the insurance company has to keep a regular tab on the average age profile, collection of premium among other features.

While SBI Life is uniquely placed to pioneer bancassurance in the country in view of its parentage, the Insurance Regulatory Development Authority (IRDA) is still to give its consent to this new method of selling insurance schemes which is very popular in Europe.

However, in the present instance, SBI�s staff will not be actively involved in selling its policies. �They will be only facilitating a service by putting the account holder in touch with us,� Krishnamurthy pointed out.

Krishnamurthy took pains to explain that the �Super Suraksha� group insurance plan will not be sold by banks. They will just make it easier for depositors and account holders to go in for a cover. SBI Life, meanwhile is talking to four banks outside the SBI fold to sell insurance schemes once IRDA ushers in bancassurance.


Mumbai, March 22: 
The Industrial Development Bank of India (IDBI) is looking to convert itself into a bank by 2003.

This was indicated by chairman P.P. Vora in a recent meeting with the institution�s employees. At the meeting, Vora is understood to have revealed that IDBI is looking for a merger with a nationalised bank which has a large statutory liquidity ratio (SLR) exposure, as it could partly take care of its resource raising requirements.

Sources said as per preliminary estimates, the leading term-lending institution may have to raise close to Rs 40,000 crore to maintain the cash reserve ratio (CRR) and SLR requirements if it were to convert into a bank.

�IDBI is therefore looking at banks that have a good resource base apart from a large SLR exposure among various other factors,� they added.

The institution, the officials said, is likely to make serious effort towards universal banking after the Centre takes firm steps towards repealing the IDBI Act, 1964.

�As the process is expected to take some time, the institution believes that conversion into a universal bank will only happen by 2003,� they added.

It may be recalled that in the Union budget, finance minister Yashwant Sinha had paved the way of IDBI�s conversion into a universal bank by proposing to repeal the IDBI Act, which currently prevents it from undertaking banking activity. The move is also expected to give more flexibility to IDBI in terms of operations.

While IDBI is learnt to be targeting an unlisted public sector bank, industry circles believe that Union Bank of India and Canara Bank are among the few that could figure in its list.

Though news about the institution targeting Delhi-based Punjab National Bank also did the rounds, this has now been virtually ruled out.

Yet another possibility that has been scuttled relates to a reverse merger with IDBI Bank, its subsidiary.

The movement towards universal banking was formally inked within IDBI in October last year when its board approved such a proposal.


Mumbai, March 22: 
FMCG major Hindustan Lever Ltd (HLL) today announced that it proposes to transfer its Diversey Lever business as a going concern to Johnson Wax Professional Private Limited, for approximately Rs 55 crore.

The Diversey Lever operations, which formed part of the detergents business of Hindustan Lever, employs 65 people and had an estimated turnover of Rs 27 crore. The unit is in the business of producing, marketing and distributing a range of products for industrial and institutional cleaning.

Johnson Wax is a 100 per cent subsidiary of SC Johnson Commercial Markets Inc, USA.

In a statement on the sequence of events leading to the sale, HLL said that in November 2001, the Unilever subsidiary, Diversey Lever, and Johnson Wax Professional Pvt Ltd had decided to combine globally to form a new company.

�HLL�s proposal follows this decision,� the official statement said.

The FMCG major said that since the Diversey Lever operations constituted an insignificant part of its detergents business, it could not be regarded as an independent undertaking of the company given its size and scale.

However, as a �matter of prudence and transparency,� Hindustan Lever has decided to seek shareholders approval by means of a postal ballot, the company added.


Calcutta, March 22: 
Delhi-based Bhusan Steel will invest around Rs 2,800 crore to set up a 1.2 million tonne hot-roll mill in Durgapur. The company has already started talks with German technology major SMS Demag for the project.

Bhusan Steel top brass has met the West Bengal government with the proposal. �This will be one of the largest investments in the state after the Rs 5,100-crore Haldia Petrochemicals,� a senior Writers� Buildings official said while confirming the meeting between the state government and the Bhusan Steel management.

According to the proposal, the greenfield project will have a sponge iron mill, a blast furnace, a hot strip mill and a captive power plant.

However, the company will make around Rs 550 crore investment in the first phase to set up the sponge iron mill, sources said.

Initially, Bhusan Steel had plans to set up a similar plant in Haldia for which the company acquired a huge plot of land.

However, with the Durgapur project now taking shape, the company is unlikely to pursue the Haldia plan.

�Durgapur has a very strong infrastructure for such a plant as the city already has two major steel plants of Steel Authority of India Limited (SAIL). The city is well connected with the railways and more importantly, it has lot of skilled manpower potential,� sources said.

Bhusan Steel has so long worked more as a conversion agent for SAIL from which it takes large amount of different steel products.

Usha Beltron

Usha Beltron Ltd, the flagship company of the Rs 1,500-crore Usha Martin group, has entered into an agreement with Gustav Wolf of Germany to manufacture steel cord, which is used for conveyor belt reinforcement application.


New Delhi, March 22: 
The six-member expert group on nidhis (mutual benefit societies) has recommended that existing nidhi companies may be allowed to continue with the present capital structure without any variation in the face value of the equity shares to maintain status quo.

However, new companies to be incorporated after the DCA notification of July 26, 2001, which specified changes in nidhi norms, should be directed to have equity shares of the face value of Rs 10 each.

For preferential allotment of shares, the group has recommended modification in the existing norm with a suitable provision that the restriction should not apply to allotment of share up to the face value of Rs 100 to new deposit holders and borrowers and in respect of qualifying shares to be held by directors.

For exclusion of preference share capital from net-owned funds, the group recommended that the government may give time up to December 31, 2003 by which these companies may either redeem or convert the preference share capital into equity share capital. It further recommended that till this time, preference share capital may be included in the computation of net-owned funds.

The six-member expert group on nidhis was constituted on February 13 this year by the department of company affairs (DCA). The committee was headed by A.R. Rao, former chairman, Income Tax Settlement Commission.

There was consensus that any nidhi that will come into existence henceforth should adhere to the regulation already notified by the government. The group has recommended extension of time for nidhis for compliance of the July 2001 notification of DCA that suggests changes in some norms for nidhis, in tune with the recommendations of the Sabnayagam committee report.

For the format of application form to contain various details about the companies, the group has recommended that the deposit application forms of nidhis should also carry an abridged version of the latest balance sheet of the company as an additional disclosure.

The group has recommended that as on December 31 this year, the nidhis should maintain a minimum 2 per cent term deposit with scheduled commercial banks, which should be raised to 5 per cent by December next year and further to 10 per cent by December 2004.

It also recommended incorporation of a provision for regulating the withdrawals from the deposit accounts in cases of unforeseen commitments. The group has recommended that margin of interest on loans should not exceed 7.5 per cent and be increased from the existing 5 per cent to 7.5 per cent.

For prudential norms, the group has recommended some modifications relating to 10 per cent of the aggregate outstanding amount of sub-standard asset, 25 per cent of the aggregate outstanding amount on doubtful asset and 100 per cent of the aggregate outstanding amount on loss asset.


New Delhi, March 22: 
PepsiCo India Holdings Pvt Ltd hopes to break even soon, chairman-incumbent Rajeev Bakshi said today. He, however, refused to divulge details in this regard.

The cola major has pumped in �close to $ 500 million in the Indian market so far,� he said at his first interface with the press after being tipped to take over the chairman�s post. The process of transition at Pepsi began last June when Bakshi joined the company. Outgoing chairman P. M. Sinha retires on March 31.

�Pepsi has established itself as a brand leader in the last decade with a critical mass. In carrying forward the legacy, we have to look not only at the carbonated soft drink market, but a whole lot of beverages to emerge as a leading beverages company,� said Bakshi.

A lemon-flavoured variant of Pepsi made its debut today. Called Pepsi Aha, (after Aha, Pepsi�s punch word) it was unveiled by Shah Rukh Khan.

Aha, known as Twist in its Pepsi�s international portfolio, will be available across the country in 300 ml returnable glass bottles (RGBs) priced at Rs 10 and in 500 ml PET bottles and cans at Rs 15.

Bakshi said some more variants can be expected from Pepsi this year, including a few for its juice drink brand Slice. He said the company expects 10 to 20 per cent of sales of Pepsi to accrue to Aha, adding Pepsi has a total market share of 48.3 per cent in the segments in which it is present. He admitted it was only in the lemon drink category where Pepsi was trailing, as Mirinda Lemon had one-fourth the market share of Limca (a Coke brand).

On chances of the Aha variant cannibalising the main brand, executive director (marketing), Vibha Rishi said one third of users are expected to shift to the variant, whereas additional two third new consumers are expected for the same � a net gain for Pepsi.

Refusing to divulge details, Bakshi said in future, the firm will leverage brands such as fruit juice drink Tropicana and sports drink Gatorade. He indicated the possibility of bringing in Pepsi�s iced tea in the future. The water brand Aquafina is in a stage of expansion, he said.

Meanwhile, rival Coke has lined up a TV commercial for Thums Up featuring Salman Khan, that takes a dig at Pepsi�s lemon flavoured variant.


New Delhi, March 22: 
Casio India Company Ltd, the 100 per cent subsidiary of Casio Japan, is set to introduce mobile handsets based on Code Division Multiple Access (CDMA) technology.

The company claims to be the largest supplier of CDMA-based mobile phones in Japan through the leading mobile phone service provider NTT Docomo. Casio also has a major share of the market for these phones in the US.

The CDMA technology has been at the centre of a raging controversy in India since fixed line operators want to use it to offer limited mobility. While the Telecom Dispute Settlement Appellate Tribunal (TDSAT) had recently ordered that limited mobility should not be stopped, another petition related to the case is pending with the tribunal.

�There is a certain demand for CDMA phone and we can bring the product once it expands. But we feel that unless the regulatory issues are sorted out, it is difficult to assess the true potential for this product in India,� said Kulbhushan Seth, chief manager market planning, Casio India Co.Ltd.

The company has recently launched a water, dust and shock proof digital camera priced between Rs 7,000 and Rs 50,000 and also a pocket PC for Rs 17,000.

�Cassiopeia BE 300 (the pocket PC) operates on a Windows CE platform. It has personal information manager, e-mail accessibility through an external modem. It also has options to connect like camera cord, Bluetooth card and memory card,� said Seth.

Next month, the company plans to launch six models of graphic calculators targeted at students, scientists, engineers and financial planners. These calculators are enhanced algebra systems and have large display, dual graph, complex functions, Linear equations from 2 to 30 unknowns, statistic calculations, Integration, Data communications, amongst others. These models will be priced between Rs 2,000 and Rs 5,000.


Calcutta, March 22: 
Footwear major Bata India Ltd today said it would restructure its operations. A notice to that effect was sent to the stock exchanges today, which added the proposal would be considered in a board meeting on March 29.

The markets are rife with rumours that Bata may reduce its workforce and even discontinue some of its manufacturing activities in India. In such a scenario, the company would have to rely more on outsourcing its merchandise.

Though a Bata spokesperson refused to give any details, Thomas Bata, honourary chairman of Bata Shoe Organisation�Bata India�s Canadian parent�had admitted during his visit to the country last year that the factory at Batanagar was not on a par with the company�s global standards.

He had also indicated that the company would not mind outsourcing its requirements to remain competitive.

There have also been talks of a possible stake hike by the parent, which holds 51 per cent now. Though the company has so far denied it, the markets are reluctant to jettison the idea. On the back of these positive expectations, the Bata stock has been performing strongly of late and closed at Rs 43.20 on the Bombay Stock Exchange today.


Mumbai, March 22: 
To contain deficit, Maharashtra will introduce a Fiscal Responsibility Bill whereby the citizens of the state can force the government to follow a path of fiscal responsibility through appropriate fiscal target, state finance minister Jayant Patil announced today while presenting a Rs 344.95-crore deficit budget for the fiscal 2002-03.

Similarly, a fiscal advisory board would be set up to oversee the implementation of the fiscal responsibility legislation, he said.

In his budget proposals, Patil outlined measures to mop up Rs 1,130 crore of additional revenue through various measures, including increase in the tax on petrol and diesel by Rs 1 each.

Salaries of all ministers would be reduced by 20 per cent and travelling and daily allowance to them be restricted to a maximum of 10 days in a month, the finance minister stated.

Nearly 29,828 posts in the government have been found to be surplus in various departments, he said.



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