| 26 in queue for bank licence |
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Mumbai, 1 July The 13th floor of the Reserve Bank of India's headquarters in South Mumbai on Monday saw an unusual sight: Many visitors carrying huge cartons filled with documents lining up before the office of Chandan Sinha, chief general manager- in- charge, department of banking operations &development. The documents, some running into more than 20,000 pages, were part of the applications for banking licences, the deadline for which expired on Monday. A total of 26 applications were received, including those from the usual corporate heavyweights like L& T, the Tata group ( Tata Sons has applied, not Tata Capital), Reliance Capital, Aditya Birla Nuvo, Bajaj Finserv, Videocon (in the name of Aurangabadbased Value Industries), apart from infrastructure financier IDFC, gold loan company Muthoot Finance, realty developer Indiabulls, micro financier Bandhan and Bangalorebased Janalakshmi. SKS Microfinance, India's only listed microfinance company, was absent, though its chief financial officer had said it would consider applying. Among surprise entries were Noida- based little- known Smart Global Ventures and Gurgaon- based advisory services firm INMACS Management. UAE Exchange India, a remittance and foreign exchange services firm and Suryamani Financing, part of the Kolkata- based Pawan Kumar Ruia group also joined the fray. The Department of Posts, Tourism Finance Corporation and government- owned financial institution IFCI were among the public- sector entities that applied. Apart from these, India Infoline, Religare, Edelweiss, Magma Fincorp, Muthoot Finance and SREI Infra Finance were also on the list of aspirants. In a statement issued on Monday, India Infoline said former Corporation Bank chairman, V K Chopra, would head its banking foray. Turn to Page 21 > A LONG- DRAWN AFFAIR 2010 |Feb 26: Former FM ( now President) Pranab Mukherjee announces in his Budgetspeech thatcorporate and business houses will be allowed to setup banks |Aug 11: RBI releases discussion paper on entryofnewbanks in the private sector |Dec 23: RBI releases gist ofcomments from the feedbackon the discussion paper 2011 | Aug 29: RBI releases draftguidelines for licensing ofnewbanks in the private sector 2012 |Jul 10: RBI releases gist ofcomments from the feedbackon draft guidelines |Dec 18: LokSabha passes Banking Laws (Amendment) Bill, paving the wayfor RBI to issue final guidelines on newbanklicences 2013 |Feb 24: RBI issues final guidelines for new banking licences |Jun 3: RBI responds to clarifications soughtby aspirants on final norms |July 1: Deadline for filing of application ends Representatives of Indiabulls ( left) and the Tata group are seen at the RBI headquarters to file applications for new banking licences, in Mumbai on Monday PHOTO: KAMLESH PEDNEKAR Profitability trends ( in %) Return Return on PAT Net interest Other operating on assets equity growth income growth growth NIM Spread Mar 09 1.1 14.5 23.3 24.4 24.0 2.7 3.5 Mar 10 1.0 12.9 4.3 14.8 3.1 2.7 3.5 Mar 11 1.1 13.6 23.6 34.6 0.5 3.1 3.8 Mar 12 1.1 13.4 14.6 15.8 7.4 3.1 3.8 Mar 13 1.0 12.8 12.8 11.0 13.8 3.0 3.3 TOI: Total operating income; PAT: Profit after tax; NIM: Net interest margin; Note: NIMs of commercial banks are calculated by taking weighted average of bank- wise NIMs, weighted by asset size; Spread between yield on advances & bills discounted and cost of customers' deposits Source: RBIs Financial Stability Report June 2013 86 ( as of March 2012) Commercial banks present Business snapshot Income components ( in %) Public 26 Private 20 Foreign 40 As on June 14, ' 13, in ₹ lakh cr Total investments 21.2 Total deposits 69.5 Total advances/ loans/ credit 53.6 Source: RBI Net interest Other Operating income to TOI Income to TOI Mar 09 62.2 37.8 Mar 10 64.7 35.3 Mar 11 71.1 28.9 Mar 12 72.6 27.4 Mar 13 72.1 27.9 INDIAN BANKING AT A GLANCE SPECIAL Coverage BANKING ON LICENCE, P4 The list of applicants includes most large corporate houses, as well as those already in the financial services business. There also are some less known names. Business Standard analyses how they are placed in their businesses |
| DIPP to move Cabinet on FDI caps for some sectors |
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New Delhi, 1 July The Department of Industrial Policy & Promotion ( DIPP) is expected to soon move the Cabinet on raising the foreign direct investment ( FDI) cap for some key sectors like civil aviation, defence, telecom and multi- brand retail. DIPP on Monday held consultations with as many as 15 ministries to collate their views on the issue. The meeting, headed by DIPP Secretary Saurabh Chandra, took place against the backdrop of the finance ministry's proposal to increase the FDI threshold in almost all sectors to boost foreign capital inflows. A panel headed by Economic Affairs Secretary Arvind Mayaram had suggested FDI limit be raised to 49 per cent in almost all sectors through the automatic route. Commerce & Industry Minister Anand Sharma also met Finance Minister P Chidambaram early Monday morning before DIPP went into inter- ministerial discussions. DIPP's meeting was attended by ministries of defence, I& B, civil aviation and petroleum &natural gas. Discussions on raising FDI caps in the multi- brand retail, power and pharmaceutical sectors will take place on Tuesday. "The home ministry has concerns on ( raising FDI caps in) telecom, defence, civil aviation and space. Its concerns have been conveyed to various departments, especially where security is an issue," Chandra said after the meeting. Turn to Page 21 > |
| Click: Article continued from…DIPP to move |
| DIPP to move... |
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On telecom, Chandra said, a final decision would be taken at the Telecom Commission's meeting, scheduled for Tuesday, and accordingly recommendations would be sent to DIPP. In defence and petroleum, the ministers concerned have said they will give their opinion on the issue through an official communication directly to Sharma. Similarly, the civil aviation ministry, too, will send in its final comments after discussing the matter internally. According to Chandra, the final report, to be regarded the inter- ministerial recommendation, will be presented by July 8. He also said ministries had "not shown much interest" in having the caps raised while final positions would only be firmed up by the end of the week. |
| Commodity volumes crash as CTT comes into play |
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Mumbai, 1 July Commodity volumes in the top- five exchanges fell over a third on the first day of the week with the imposition of a new tax regime. The government imposed atax of 0.01 per cent on commodities from the beginning of the month, a step first mooted in the budget. This commodity transaction tax ( CTT) took a toll on non- agri commodities volumes, as jobbers stayed away, according to market participants. Jobbers are market players who generate high volumes through multiple buy and sell orders, usually to take advantage of differences in the price of a security across different segments. The turnover of non- agri commodities of the top- five commodity exchanges witnessed afall of 38 per cent in the day session of trade. Multi Commodity Exchange ( MCX) turnover volumes have fallen 41.55 per cent to ₹ 17,138.77 crore compared with the average daily turnover of ₹ 29,320.13 crore in June. National Commodity & Derivatives Exchange turnover volumes have fallen 25.99 per cent to ₹ 1,486.63 crore today compared with an daily average turnover of ₹ 3,306.43 crore in June. Commodity volumes had last fallen close to 40 per cent on June 21. When contacted for comment an MCX spokesperson said they had complied with the CTT notification. An NCDEX spokesperson attributed this fall not only to CTT, but also due to good rainfall in Madhya Pradesh, the largest producer of soy bean. The exchange sees around 35 per cent of its volumes come from oil seed and they have also come under the CTT as the government has classified them as non agri commodities. Dilip Bhatia, CEO of ACE said, " The turnover of commodity exchanges have been impacted due to CTT although we are not present in the metal space as many agri items have been classified as non agri." ACE commodity exchange sees 40 per cent of its turnover come from soy oil and the oil seed category has also been classified as non agri by the government. Bhatia further added that there may be some recovery in volumes later but it wont go up to what it used to be as CTT will have a negative impact on commodity trade on exchanges. Non- agri items turnover on top- five commodity exchanges sees 38% fall The commodity transaction tax took a toll on non- agricultural commodities volumes, as market players stayed away COMMODITY TURNOVER (₹ cr) Day session for MCX, NCDEX, ICEX Jul 1 70,000 60,000 50,000 40,000 30,000 20,000 27,593.65 Jun 3, 2013 21,300.43 Source: Exchanges Compiled by BS Research Bureau |
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