While there is more than one irritant that the bank and the insurer are trying to sort out, sources close to the development said the biggest roadblock is the rights that IAG will enjoy if the proposed venture gets a go-ahead from the SBI board. The issues are likely to be discussed at the board's meeting on Friday.
Banks levy a fee on transactions under core banking solutions.
With higher interest rates, bankers today said their loan portfolios will grow at a slower pace, partly because of the caution being exercised by lenders themselves.
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.
Life Insurance Corporation of India, which is among the largest property owners in India, is planning to acquire land worth Rs 2,000 crore (Rs 20 billion) this year to develop commercial and residential complexes. This will be in addition to the Rs 1,100 crore (Rs 11 billion) it spent last year for purchasing lands across the country.
Conservative industry estimates place the cash component of mutual fund houses at Rs 25,000 crore (Rs 250 billion). Fund houses had up to 15 per cent in cash, as per the April 30 figures. The cash component exceeded 15 per cent in as many as 30 diversified equity growth funds.
Index funds - the so-called passively-managed funds - are no longer a low-cost affair.
The growth in the first year premium (FYP), particularly in unit-linked insurance policies (ULIPs), of life insurance players, has been largely unaffected by the unprecedented stock market volatility in the last quarter. Sources at the Life Insurance Corporation indicated that the market conditions have not impacted the sale of ULIP products and the business growth was absolutely in sync with expectations. SBI Life registered a growth of around 90-95% in the quarter ended Mar
The move is under consideration as the cash transaction reports just from commercial banks have shot up from 2.2 million to nearly 6 million for FY08. The number could go up further since data for the full financial year is still being compiled. Similarly, last year, the agency received more than 2,500 suspicious transaction reports from various entities in the financial sector, as compared with 817 in FY07.
Mutual fund houses are bullish on the financial sector, notwithstanding the recent beating at the stock market. Fund houses like Kotak Mahindra AMC, Sundaram BNP Paribas & LIC Mutual Fund have drawn up plans to introduce products aimed at the financial services sector. Bank stocks for long had been one of the favourite picks for many fund managers. There was a slowdown in valuations of financial sector stocks but Indian corporate entities still continue to remain attractive.
The mutual fund industry is certain that the Sensex, which plunged to below 16,000-level on Friday, has hit rock bottom and there is only one way the market would move from here, which is upward. The move to provide more disposable income in the hands of individuals is also good for the markets. The Asset Management Companies are of the opinion that the India growth story is definitely on as far as the medium-to-long-term future is concerned.
LIC will kickstart its credit card business in September 2008.
As volatility continues to plague the emerging markets, India has been the worst performer after Vietnam this year. The US credit crisis and fears of a recession in the world's largest economy is compelling the foreign funds to dump stocks.
Although the recent turmoil in the market is viewed as a correction by the large fund houses, they are yet to foresee any good news, at least for the time being.
Bird flu epidemic in West Bengal has exposed the low levels of poultry insurance found in the state.
ICICI Venture has tied up with a global healthcare investor to put in funds in India's healthcare sector.
India's insurance sector is predicted to grow at 30% this fiscal compared to 95% of the last year.
Pvt life insurers are planning to foray into health covers, with standalone health insurance policies.
The survey revealed that firms were using a combination of measures like internal cost control and investment in new technology to combat the problem and stay afloat. There was a shift to a more capital intensive and labour saving manufacturing process in the small and medium scale sector. This meant significant downsizing in labour force on account of rupee appreciation.
Any initiative backed by a political institution and intention, would not achieve the desired result of serving the common man. The pre-condition of success is its management by a private entity with ownership shared between the promoters and the common people.
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