With terror attack claims likely to wipe out over 70 per cent of the Rs 700-crore (Rs 7 billion) terror pool, insurers are expected to chip in with additional funds to replenish the corpus and raise the premium paid for terrorism insurance.
Insurance industry is gearing up to clear claims from the attack on Mumbai even as many of the injured are finding it tough to produce the required documents.
Because of the terrorism insurance pool created after the terror strikes in the US, insurers said, costs will be manageable for Indian companies and they will continue to get risk covers. The Insurance Regulatory Developmental Authority has mandated all general insurance companies be allied to a common pool for terrorism insurance. So, premium of terrorism insurance collected by all general insurance companies flows into a common pool.
A committee headed by Irda's member actuary R Kannan has suggested a grace period of 15 days for policyholders who pay premium on a monthly basis, while a 30 days grace period will be available to those who pay their premium annually, half-yearly or quarterly.
Indian shipping companies' reluctance to take piracy insurance is probably linked to sky-rocketing costs. According to the site of London-based corporate security firm BGN Risk, piracy in the Gulf of Aden could increase insurance and transport costs by $400 million. Special risk insurance for crossing the Gulf has soared from $500 a voyage last year to $20,000 now, the company said.
At a time when the global banking industry is feeling the pinch of the global credit crunch, Central Bank of India is planning to expand its foreign presence.
At least 150 of the 205 employees at Lotus India Mutual Fund may lose their jobs.
They say liquidity remains a major cause of concern, and the coming quarters could witness a significant rise in non-performing assets. According to them, a robust risk management system, adequate capital infusion and regulatory reforms is crucial if India's economic growth is to remain intact in the medium and long term. Banks are facing immense liquidity pressure, as resources gradually disappear from the system. Banks have also been unwilling to lend each other.
The average, fixed cost of setting up an ATM is estimated at Rs 600,000-800,000. There are about 30,000 ATMs in India. The RBI norms will enable small banks to benefit from low-cost, switch-enabled ATM services without opting for expensive bilateral tie-ups.
With recession threat looming large, Indian corporate houses may be forced to rethink their projects, which have been stalled following problems in land acquisitions, industry analysts said.
In an effort to soothe nerves of the country's mutual funds and the non-banking finance companies, the bankers today assured that they would come forward to support these financial institutions' funding needs including liquidity to meet redemptions.
It is mission damage control and ICICI Bank is pulling out all the stops. Weighed down by persistent rumours over its health, the bank's top management will meet senior employees on Monday to reassure them about their future.
The company has appointed an investment banker to find a buyer for its equity in its joint venture company, Raymond UCO Denim, whose loss doubled to Rs 120 crore (Rs 1.2 billion) in the last financial year. Europe's UCO Denim holds 50 per cent stake in the denim company, which was formed in August 2006. The turnover of the denim business is estimated at Rs 600-800 crore (Rs 6 to Rs 8 billion).
The bank approached RBI for the second time in August this year. The erstwhile development financial institution had approached the regulator in 2007 to get into the private equity business. While no formal proposal was moved, RBI had then advised the bank to concentrate on its upcoming life insurance business. Its joint venture with Fortis and Federal Bank is now up and running.
The stressed asset business will be a mix of an ARC and a distressed asset fund. Ambit has already started insurance brokerage and equity research and sales businesses this year. It closed a $100-million private equity fund called Ambit Pragma Ventures recently. It is also keen on starting proprietary trading.
IT major Wipro Technologies and Gurgaon-based knowledge process outsourcing firm Copal Partners have expressed interest in bidding for the Indian back office business of Lehman Brothers Holdings, the US-based investment banking firm that filed for bankruptcy protection on Monday.
The Reserve Bank of India has initiated a review of the benchmarking system for pricing floating rate loans, a move that could impact 70 to 75 per cent of banks' loan portfolios.
As the tides of investments change over time, venture capital funds are shifting their focus to businesses related to consumer demand such as education, media and entertainment, food & beverages and alternative energy.
Banks levy a fee on transactions under core banking solutions.
This comes after both parties failed to arrive at an agreement on an appropriate valuation of the stake, a company executive said. Sterlite bought 51 per cent stake in Balco in March 2001 for Rs 552 crore (Rs 5.52 billion) when the National Democratic Alliance (NDA) government decided to divest the government stake in the public sector company.
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