ECBs may be allowed to put loans upto $ 500 million for rupee expenditure by Indian infrastructure companies under the automatic approval route. At present, such loans need RBI approval. The government may also raise the limit for dollar borrowings for rupee expenditure, which would need RBI approval. So, if a company is borrowing say $ 750 million, it can immediately access foreign funds up to $500 million without prior permission, but will need approval for the rest.
The screening of data is more intense in the case of foreign and some private banks which act as custodians for foreign institutional investors, according to sources close to the development. Indian banks, both public and private, send capital to their foreign offices for everyday requirements in the inter-bank market and for client commitments.
The government has sought data from the Reserve Bank of India to consider a proposal to enhance the investment limit for bank exposure to equity markets. This will be part of several measures to boost domestic institutional participation in the markets at a time when foreign institutional investors are exiting.
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.
Guidelines may be relaxed with strict quality checks.
The Institute of Actuaries of India has formed a technical group and is working out modalities in consultation with the Insurance Regulatory and Development Authority to set risk-based capital norms for the industry. Under the current Irda regulations, insurers are mandated to maintain a solvency margin of 150 per cent. Accordingly, insurance companies have to maintain 150 per cent of the amount underwritten by them in cash.
The fund will close in two tranches, with the first tranche of $ 100 million expected to close in two months. However, the company has not set any time-frame for raising the entire corpus of the fund. In addition, Dewan Housing Finance, the parent entity, is also looking to raise Rs 150 crore (Rs 1.5 billion) to bolster its operations. The fund-raising may also be in the form of equity dilution.
The move comes at a time when four foreign banks - Standard Chartered, Hongkong and Shanghai Banking Corporation, American Express and Citibank -- have moved the Supreme Court with a special leave petition and the hearing for admission of SPL is on September 8. The committee is, however, expected to wait till the Supreme Court decides on the issue before finalising its recommendations. The committee is, however, expected to wait till the Supreme Court decides on the issue.
Life Insurance Corporation of India has asked the Insurance Regulatory & Development Authority to allow it a shareholding of up to 20 per cent in a company.
With the top life insurance companies planning to list next year, the Insurance Regulatory Development Authority is setting up a committee for working out a mechanism to decide the valuation and the likely initial public offer price.
ICICI Bank and HDFC Bank, the two leading private sector banks in the country, said cash sales for cars and commercial vehicles have doubled to 30 per cent of the total sales compared to a year ago. In the case of two-wheeler buyers, more than 30 per cent are paying in cash
In a move that will bring cheer to health insurance policyholders, non-life insurers are finalising the contours of a new product that will have a common minimum standard cover and will be renewable and portable across companies.
High interest rates and lack of funds has hit non-banking finance companies. Though banks had extended loans to NBFCs at fixed rates, there is a reset clause which is now being exercised. Besides, the increase in interest rates is impacting companies that were borrowing directly from the market. What is also making life tough is the demand for longer-tenure loans by borrowers as they want to keep the equated monthly instalments under control despite a rise in interest rates.
The next time you buy a householder's insurance policy, you could be paying premiums that are 35 to 50 per cent lower. This is the result of the de-tariffing or lifting of price controls on insurance policies from January this year.
According to sources privy to the information, default rates have touched 5-6 per cent in the past six months as against the usual 1-2 per cent. Banks and other lending organisations agree that there has been a rise in delinquency rates, but the increase has only become significant during the past one month following the fuel hike. Fuel costs account for about 60 per cent of the total operating expenses of truckers.
LIC, ICICI Prudential invest Rs 13,000 crore (Rs 130 billion) and Rs 2,000 crore (Rs 20 billion) respectively in the first quarter of FY09.
General Insurance Corporation, the country's only reinsurer, will be launching Retakaful -- reinsurance based on Shariah principles -- in this financial year. Retakaful will provide reinsurance support and will be based on the Islamic principles called Shariah. Reinsurance refers to insuring insurance companies. Similarly, a Retakaful company provides reinsurance support to Takaful insurance companies (insurance companies following the Islamic concept of insurance).
An increasing number of companies are outsourcing superannuation, gratuity and leave encashment programmes of their employees to insurance companies.The trend that emerged two years ago has got a shot in the arm with SAIL, Nicholas Piramal, Vishakhapatnam Port asking insurers to manage their employees' retirement programmes.
Life insurers have decided to pass on service tax to customers. The chief financial officers of life insurance companies met last Wednesday and have decided to pass on the service tax burden to customers, confirmed officials of various life insurance companies.
The amount is almost double the Rs 220 crore (Rs 2.2 billion) that a consortium of Bank of Baroda and Andhra Bank earned for its life insurance tie-up with the UK-based wealth and investment company, Legal & General Group (see table). The entry premium is a result of regulations that require foreign insurers to tie up with Indian partners. SBI will hold 74 per cent in the non-life insurance company and IAG the remaining 26 per cent.
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