Bank of America pays Mukesh Ambani Rs 1.3 cr as director pay

Indian billionaire industrialist Mukesh Ambani has been paid $240,000 (about Rs 1.3 crore) as director compensation for 2012 by global banking giant Bank of America - a position he would relinquish next month.

Ambani, who heads the Indian conglomerate Reliance Industries group, was paid a higher compensation of $276,816 by the bank in the previous year, 2011.

Ambani joined Bank of America’s board as an independent director in March 2011, but would step down from this position at the company’s next Annual Meeting of shareholders on May 8.

The US-based banking major announced last month that Ambani would step down as a director and join its new, non-fiduciary global advisory council.

The bank has disclosed the compensation paid to Ambani and other details in a notice circulated to its shareholders ahead of their Annual Meeting on May 8.

The bank also said that Ambani and five other directors currently on its board would not seek re-election at the Annual Meeting and would be replaced by new members on its board. The shareholders have been asked to ratify the changes.

As per the shareholder notice, a copy of which has been filed with the US markets regulator SEC as well, Ambani’s compensation for 2012 included $80,000 as ‘fees earned or paid in cash’ and $160,000 as stock awards.

In comparison, Ambani got fees worth $92,282 in cash and $184,534 through stock awards in 2011 - taking his total compensation for that year to $276,816.

As on March 13, 2013, Ambani held a total of 31,265 shares of the bank, which have been given so far to him as part of his director compensation.

As RIL Chairman, Ambani’s remuneration is not known as yet for the last fiscal 2012-13 that ended last month. Prior to this, Ambani’s remuneration at RIL has remained unchanged at Rs 15 crore for four consecutive years till 2011-12.

The bank said that its board held 13 meetings in 2012, and each of its current directors attended at least 75 per cent of the aggregate meetings of board and the committees on which they served, except for Ambani.

Ambani is a member on the Credit Committee and the Compensation and Benefits Committee of its board.

In further disclosures about its dealings with businesses associated to Ambani and other independent directors, Bank of America said admitted to having provided “banking products or services, including markets, commercial credit, investment banking, managed investments, personal products and treasury services, in the ordinary course, to” Reliance Industries (RIL) and other such companies.

However, the fees received from each of these companies, including RIL, were within the prescribed thresholds applicable for independent directors and were less than 2 per cent of its consolidated gross annual revenues, the bank said.

It made a similar disclosure about business with Reliance Group, headed by Mukesh’s younger brother Anil Ambani.


Source: thehindubusinessline

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Central Bank of India ties with ADAG firm for credit card

Public sector lender Central Bank of India said it has partnered with ADAG firm Reliance Big Cinemas to launch its co-branded credit card.

The card that has been designed especially for movie-goers, can also be used for shopping, dining, fuelling, booking railway tickets, payment of hospital bills and also on e-commerce platforms.


Source: Economictimes

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World Bank arm IFC open to investing in Religare’s proposed banking venture

The International Finance Corporation (IFC) has indicated its willingness to invest in Religare’s proposed banking entity. IFC is an arm of the World Bank which invests and lends to the private sector.

IFC has invested $75 million (around Rs 405 crore) in Religare through compulsorily convertible debentures. This transaction has been completed. Once all the debentures are fully converted into equity, IFC will have 7.9 per cent equity making it the single largest institutional investor in Religare. This is the largest investment by IFC in financial sector in entire South Asia.

Religare, in its notice to BSE last month, informed that 1,000 equity shares of face value of Rs 10 each for cash at a price of Rs 315.85/per equity share allotted against 40,48,354 15 per cent compulsory convertible debentures of face value of Rs 1000/each, for cash at par, on a preferential allotment basis to IFC.

Religare is one of the few corporates interested in applying for a new banking licence. When asked about any plan to invest in the new venture, IFC’s Director (Financial Market-Asia) Serge Devieux said, “We will be open to do so. We will decide at the time of setting up.” However, it will depend upon Religare’s willingness, he added.

On his part, Group CEO of Religare Enterprises Sachindra Nath said any decision will be taken later. But he said that IFC’s focus on inclusive growth and financial inclusion will be keys. Religare has been identified by IFC as ‘Partner in Development’ to work collaboratively towards co-developing relevant financial products and services for individuals and SMEs in India.

IFC intends to invest approximately $1 billion in India during year 2012-13 starting (July-June). It has already invested nearly $400 million. Apart from Religare, it has invested in Inox and Power Grid

Shishir.Sinha@thehindu.co.in

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Anil Ambani denies HSBC Bank account allegation

A spokesperson for Anil D. Ambani categorically denied all allegations made by Arvind Kejriwal against him today.

The spokesperson stated, "Anil D. Ambani had no bank accounts with HSBC in Geneva. It is regrettable that such baseless allegations are being made by IAC at the behest of vested interests."

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Reliance MF signs distribution pact with IOB

Reliance Mutual Fund, a part of Reliance Capital, on Thursday said it has entered into a distribution tie-up with Indian Overseas Bank (IOB).

As per the agreement, IOB will sell Reliance MF products through its 2,689 branches.

“This agreement would help us expand our customer base, especially in tier II and III cities, leveraging on the wide network of the bank,” Reliance Capital Asset Management chief executive Sundeep Sikka said.

Referring to the distribution tie—up, IOB Chairman & Managing Director M Narendra said, “This would enable the bank to operate as a financial super market and help in strengthening the relationship of the existing and potential customer base, providing an opportunity to cross—sell.”

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Reliance Life open to talks on bancassurance tie-up

Reliance Life Insurance aims to be in the top three league of private life insurers by premium income in the next three years.

To meet this aspiration, the company has now realised that it needs to get on board a bank of a critical size as a bancassurance partner.

As on date, Reliance Life is in the sixth position in premium income among the private players. Bancassurance has been a distribution gap for Reliance Life.

To bridge this gap, Reliance Life is now open to discussions on giving a very small equity (say up to 5 per cent) to a good candidate (bank) as distributor stock option.

But the company has ruled out giving any upfront money for bancassurance tie-ups as sought by some banks, if such deals are legal.

“Upfront money is not legal and not permitted in any law. We know it is not legal and so there is no point offering it also,” Malay Ghosh, President and Executive Director, Reliance Life, said in an interview to Business Line here.

“If a company in five years can create value for us, we are ready to give small equity to them at today’s valuation with guarantee to buy them back at future valuation. This is possible. But giving upfront dowry our promoters do not like.”

According to him, to address the bancassurance gap, the company is working on two-pronged strategy.

First, it will undertake more intensive discussions with the insurance regulator and engage with it to see that the bancassurance guidelines — which talks of opening up bancassurance in whatever form — happen fast.

The company is also talking to every bank in India and impressing on it that if an opportunity comes for it and if it looks for another partner (if not happy with the current one), it might think of Reliance Life as a partner.

Reliance Life Plus Club

Reliance Life Insurance, a part of Reliance Capital, has launched a first-of-its-kind customer service initiative — ‘Reliance Life Plus Club’.

Inspired by ‘Zutto Motto’ (forever more service) service at Nippon Life, Reliance Life has under the new initiative made it mandatory for all the sales agents and channel partners to visit its policy holders at least once in a year.

During the interaction, these representatives would review the customers’ existing policies, understand the changes and developments in their lives since the last policy was issued, evaluate current insurance needs and offer advice on suitable new products.

Such a structured post-sales customer service platform will help reduce mis-selling, according to Malay Ghosh.

The Indian life insurance industry is facing issues on orphan policies and also complaints on mis-selling.

The company targets to meet 1 million customers (out of 9.5 million customers) by the end of the current financial year.

srivats.kr@thehindu.co.in

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Aegon launches online health plan

Aegon Religare Life Insurance Company launched an online health plan today in Mumbai.

Called iHealth Plan, it covers hospitalisation and surgery expenses. This is a fixed benefit plan covering 849 surgeries and provides for lifelong renewal of health cover till the age of 100 years.

An important feature of this plan is that it can be used to provide cover for in-laws in addition to other family members such as spouse, children, parents and siblings.

Mr Rajiv Jamkhedkar, Managing Director and Chief Executive Officer, said the focus of the online plan was simplicity, convenience, premium stability and offering value for customers. He said that their earlier online term insurance plan had about 35,000 customers. Online policies accounted for about a fourth of the total policies sold by the company, he said.

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Reliance Capital gets RBI nod for mutual fund business stake sale

The Reserve Bank of India has approved Anil Ambani-led Reliance Group's Rs 1,450 crore stake sale in its mutual fund business unit to Japan's Nippon Life.

The diversified conglomerate's financial services arm Reliance Capital is selling 26 per cent stake in RCAM (Reliance Capital Asset Management Company) to Nippon Life for Rs 1,450 crore - making it the largest ever Foreign Direct Investment (FDI) in the Indian mutual fund space.

Sources said that RBI has cleared the deal, bringing it a step closer towards its completion. The transaction has already been cleared by the Competition Commission of India (CCI) and might be completed soon after achieving a couple of more remaining regulatory approvals, they added.

"We have no objection to your company transferring 26 per cent of the issued and paid-up equity shares in RCAM to Nippon Life," RBI communicated to the company in a letter dated June 7, 2012.

The Nippon Life transaction values RCAM, the country's most profitable fund house, at about Rs 5,600 crore.

The final agreements for this deal was signed in late March this year.

Reliance Capital has already completed another deal with Nippon Life, wherein the Japanese financial services giant has acquired 26 per cent stake in Reliance Life Insurance for Rs 3,100 crore, valuing the life insurance venture at about Rs 11,500 crore.

For the last fiscal ended March 31, 2012, RCAM posted a net profit of Rs 276 crore, retaining its position as the country's most profitable fund house for the second year.

The company's profit after tax grew by over five per cent from Rs 261 crore in the previous fiscal 2011-12. Its profit before tax also grew by five per cent to Rs 308 crore in the fiscal ended March 31, 2012.

Reliance Capital AMC (Asset Management Company) had overtaken HDFC AMC as the country's most profitable fund house during the previous fiscal 2010-11 and has managed to retain its leadership position.

Reliance Capital Asset Management managed Rs 1,40,853 crore ($27.5 billion) as on March 31, 2012, across mutual funds, pension funds, managed accounts and hedge funds.

Reliance Mutual Fund figures among the top two mutual funds in India, in terms of AUM, with market share of nearly 12 per cent and its average AUM stood at Rs 78,112 crore for the period ended March 31, 2012.



Source: EconomicTimes

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LIC prunes Reliance Ind stake; FIIs hike more in Q4

LIC lowered its stake in Reliance Industries Ltd (RIL) with sale of shares worth an estimated Rs 500 crore during the previous quarter, but foreign investors raised their holding by more than Rs 1,200 crore during the same period.

As per its latest shareholding pattern, filed by RIL with the stock exchanges on Tuesday, LIC’s stake in the firm dipped from 7.31 per cent to 7.09 per cent during the January-March, 2012 quarter.

During the same quarter, the total holding of foreign institutional investors (FIIs) in the company rose from 17.03 per cent to 17.55 per cent.

As per RIL’s current valuation of Rs 2,44,412 crore, the decline of 0.22 per cent stake in LIC’s holding would be worth over Rs 500 crore. On the other hand, the increase of about 0.52 per cent in the FII holding is estimated to be worth over Rs 1,200 crore.

Among individual foreign shareholders, the holding of the Government of Singapore in RIL rose to 1.16 per cent during the quarter, from 1.09 at the end of previous quarter.

Also, the stake of Franklin Templeton Investment Funds rose to 1.22 per cent, from 1.08 per cent.

The total holding of domestic institutional investors declined from 11.35 per cent to 10.71 per cent.

For the fiscal ended March 31, 2012, the FII holding declined marginally from 17.7 per cent to 17.55 per cent, while that of domestic institutional investors also dipped from 10.79 per cent to 10.71 per cent.

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Reliance Life launches Classic Plan II

Reliance Life Insurance Company (RLIC), part of ADAG’s Reliance Capital Ltd, on Thursday launched a new unit-linked plan, called Classic Plan II, that offers customers dual benefits of insurance protection and market-linked return.

Announcing the launch here, Mr Malay Ghosh, President and Executive Director, Reliance Life, told reporters that this was the first time that the company is introducing a new life cover option in its unit-linked investment plan portfolio that offers the customer life cover benefit equal to the sum assured or the fund value, whichever is higher.

The existing ULIP plans in RLIC’s portfolio offer life cover benefit equal to the sum assured plus fund value.

The plan offers regular as well as single premium options. The premium for the regular option starts at Rs 15,000 and for the single premium at Rs 50,000. The policy terms under the plan will be 15 to 30 years.

Reliance Life has Rs 17,855 crore worth of assets under management. Seventy per cent of its premium comes from the traditional policies and 30 per cent from ULIPs.

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Reliance Life launches new money-back plan

Anil Ambani Group controlled Reliance Life Insurance Ltd is planning to engage young graduates and housewives to break into the rural and semi-urban markets.

Unlike the traditional model of paying commission to insurance agents on the basis of business generated by them, Reliance Life plans to engage fresh graduates on a trainee basis on a fixed stipend to distribute its products.

This apart, the company also plans to employ young women freshly out of college or housewives at a fixed monthly salary in select locations, said Mr Malay Ghosh, Executive Director and President, Reliance Life.

Reliance Life, Mr Ghosh said, will report accounting profits this year.

Financial outlook

However, the company, which had expected to break even in the next three years, will be able to do so only after five years.

“For the last 18 months we have been making profits on a month-on-month basis. We are hopeful of making accounting profits this year. However, we will take five more years to break even because of the recent regulatory changes in the industry,” he pointed out.

The company today unveiled protection riders for its existing policies and also launched a new product — Reliance Life Insurance Guaranteed Money Back Plan. This apart, the company will also launch a unit-linked product — Classic II — by the end of this month.

shobha@thehindu.co.in

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Insurance venture: Bharti ends talk with Reliance

Bharti Enterprises and Reliance Industries on Friday terminated talks for the stake sale in Bharti AXA insurance companies due to differences over issues related to long term vision and joint governance.

“AXA, Bharti, Reliance Industries (RIL) and its associate Reliance Industrial Infrastructure (RIIL) announced today that they have mutually agreed to terminate their negotiations on the proposed acquisition by RIL and RIIL of Bharti’s shareholding of 74 per cent in Bharti AXA Life Insurance and Bharti AXA General Insurance,” Bharti said in a statement.

In a separate statement, RIL said the talks were terminated as parties had failed to “reach agreement on long—term vision and joint governance of the ventures.”

After nearly five years of its association with France’s AXA, Bharti had in June announced it would exit from the financial services JVs and sell its entire 74 per cent stake in both general and life insurance businesses. Industry experts had valued the deal at around Rs 5,000 crore.

“Bharti AXA Life and Bharti AXA General Insurance will continue to develop their operations in India, as they have successfully done over the past years, and build a sustainable and long—term business by tapping the significant growth potential offered by the Indian market,” it added.

The company had entered into these joint ventures with the AXA group in 2006 and held 74 per cent stake in both these ventures - Bharti AXA Life Insurance and Bharti AXA General Insurance.

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Mutual funds hike exposure to Reliance Industries; lower valuations attractive

NEW DELHI: Shares of Mukesh Ambani-led Reliance Industries may have traded weak on the bourses in the recent months, but mutual funds have enhanced their exposure to the stock, attracted by its lower valuation.

More than 200 mutual fund schemes purchased fresh RIL ( Reliance Industries Ltd) shares, worth an estimated Rs 1,500 crore at current value, during the last quarter.

In contrast, about 100 schemes sold RIL shares from their portfolio during the quarter ended September 30. These shares are worth about Rs 350 crore at the current market price.

The MF schemes having purchased fresh RIL shares during the quarter also included those from Anil Ambani-led group's Reliance MF, the country's biggest fund house.

Interestingly, the RIL stock fell sharply by about 11 per cent during the July-September 2011 quarter.

In the past one year, RIL stock has dipped by over 20 per cent and hit a 52-week low of Rs 713.55 on August 26, 2011 and is currently trading near Rs 884 level.

But, RIL figures prominently on the portfolios of various MF schemes, by virtue of being the country's most valued firm and its high weightage on key market indices including Sensex.

MFs collect money from various investors, including the retail participants, for their different schemes and then invests the same in stocks, bonds and other securities.

One fund house generally runs a number of schemes for different market segments.

RIL is the second most-held stock after ICICI Bank by all the fund houses together. It figures on the portfolios of more than 300 MF schemes and all the funds together held RIL shares worth about Rs 6,800 crore at the end of September.

An analysis of quarterly portfolio disclosures of various funds shows that as many as 210 schemes together bought more than 1.7 crore fresh shares of RIL during the last quarter.

On the other hand, about 41 lakh RIL shares were sold by a total of 97 MF schemes during the quarter.

Only two schemes, belonging to Franklin Templton MF, had no change in their RIL holding during the quarter.

Those having sold RIL shares included only one Reliance MF scheme, while about a dozen schemes of the fund house purchased fresh RIL shares during the quarter.

Besides, the shares were also bought by various schemes of ICICI Pru, UTI, HDFC, Birla Sunlife and Franklin Templeton.

Interestingly, Reliance MF had lowered its exposure to RIL in the last fiscal.

On its part, RIL continued to avoid Reliance MF for its investment needs during the fiscal ended March 31, 2011, even as it parked money in a host of schemes from other funds.

A host of other funds had cut their RIL exposure during the last fiscal and the stock lost its position as the top- held stock for overall mutual fund space to ICICI Bank.

Source: EconomicTimes

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Dhanlaxmi shares tank on window-dressing charges

Kerala-based Dhanlaxmi Bank’s stocks tanked on Tuesday on allegations that the bank had resorted to window dressing and that its profitability was under pressure. The allegations were made by an employees association. The Thrissur-headquartered bank’s management, however, refuted all charges.

The All-India Bank Officers Confederation (AIBOC) has written to the Reserve Bank of India (RBI), expressing concerns over the financial health of the bank. The employees association also opposed the extension granted to chief executive Amitabh Chaturvedi for a period of three years. “If the present management continues to be at the helm, the situation may deteriorate further,” said G D Nadaf, general secretary, AIBOC.

The 1927-founded bank's stock slumped 24.22 per cent in intra-day trade to touch a two-year low. However, it gained later, following the management’s denial of the mismanagement charges. The stock closed at Rs 64.45, down 10 per cent compared to its previous close.

The officers association has highlighted several concerns like the dependence on over-night borrowed funds, the capital adequacy ratio, and accused the bank of no real growth in the last six months. The association also alleged the bank was turning away from social banking by not catering to small agricultural borrowers, and levying high service charges.

However, in a detailed statement, the management said, “Dhanlaxmi Bank would like to unequivocally reiterate that all such allegations are baseless, and represent a motivated attempt by one of the employee associations de-recognised by the bank.”

“Moreover, the central bank had, last week, granted the bank's managing director and chief executive, Amitabh Chaturvedi, a second term of three years. The re-appointment is an affirmation of the fact that the audits and inspection of the bank's books have found nothing amiss,” the bank added.

In late 2008, the bank had put in place a new management team, headed by Chaturvedi, who earlier worked with aggressive organisations like Reliance Capital and ICICI Bank. Chaturvedi, with his new team, shrugged off the image of a regional lender and had chalked out plans to become a pan-India bank. After Chaturvedi's induction, the bank registered a whopping 229 per cent growth in advances between December 2008 and June 2011, and diversified its loan book, with emphasising on retail banking. The new management also unveiled a new logo for the bank and shifted treasury operations to Mumbai, though the bank continued to be headquartered at Trissur.

Dhanlaxmi's aggression on lending, branch expansion and venturing into newer businesses had also promoted the central bank to ask it to modify its speed. The bank, however, said it would consolidate its business this financial year, as business remained subdued due to the tight monetary policy.

Source: Business Standard

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Reliance mutual fund pips HDFC MF to become most profitable fund house

NEW DELHI: Reliance mutual fund has overtaken HDFC mutual fund to become the country's most profitable fund house, as per their profit figures for the latest financial year.

For the financial year 2011, profit after tax of Reliance MF stood at Rs 261 crore, while that of HDFC MF was Rs 242 crore.

On year-on-year basis, Reliance Asset Management company's PAT rose by as much as 34 per cent in the Fiscal 2011, whereas HDFC MF's profit increased by 16.34 per cent, according to the Association of Mutual Funds in India's data.

While UTI MF's figures were not available for the latest fiscal, Franklin Templeton is currently ranked the third most profitable with a PAT of Rs 97 crore (for fiscal year ended September 2010).

Most of fund houses follow April-March financial year. Others in the top ten include Birla Sun Life AMC with a PAT of Rs 85 crore, followed by SBI AMC (Rs 79 crore), ICICI Prudential AMC (RS 72 crore), DSP AMC (47 crore), Tata AMC (17 crore) and Kotak AMC (Rs 11 crore).

Meanwhile, on September 27, speaking at the Annual General Meeting of Reliance Capital, Anil Ambani had said that the talks for a stake sale in its asset management business to Nippon were also in advanced stages.

The company also plans to take its asset management businesses to other emerging markets and would look at further expansion of its wealth management and private equity businesses, Ambani had said.

Source: Economic Times

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HDFC MF overtakes Reliance MF to become largest fund house

NEW DELHI: HDFC Mutual Fund with an average asset base of Rs 91,827.11 crore has overtaken Reliance MF to become the country's largest asset management company.

This is the first time since 2009 that the average assets under management (AUM) of Reliance MF fell below the Rs 1 lakh crore.

At the end of September, the AUM of Reliance MF declined by Rs 10,598.72 crore or 10 per cent to Rs 90,660.60 crore.

HDFC MFs asset base too witnessed a decline of Rs 205.79 crore or 0.2 per cent to Rs 91,827.11 crore at the end of September.

Reliance Capital Asset Management CEO Sundeep Sikka had earlier said that the company was focusing on increasing its retail customers base, rather than on bringing AUM through institutional investors.

As at the end of September the average assets managed by the mutual fund industry, consisting of 41 active players, stood at Rs 7.12 lakh crore.

The MF industry witnessed decline in their average AUM by Rs 31,255.34 crore or 4.2 per cent, as per the data available with industry body Association of Mutual Fund Industry (AMFI).

The combined average AUM was Rs 7,43,083.91 crore in end-June.

Besides, ICICI Prudential MF and UTI MFs assets declined 5.7 per cent and 9.4 per cent. At the end of September quarter, ICICI Prudential's AUM stood at Rs 75,217.10 crore and UTI MF's at Rs 62,579.86 crore.

The industry has seen an AUM decline of 5 per cent in December quarter and 2 per cent in March quarter. This was followed by a 6 per cent increase in the June quarter.

As many as 22 players witnessed a decline in their AUM in the September quarter.

Among the other players Birla Sun Life MF saw their average assets declining 4.8 per cent to Rs 64,217.03 crore. Also SBI MF average AUM fell 0.3 per cent to Rs 47,731.39 crore.

Source: Economic Times

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RBI OK's Reliance Cap's RL stake sale

Mumbai: The Anil Dhirubhai Ambani Group's (ADAG) financial services arm Reliance Capital today said it has received approval from the Reserve Bank of India (RBI) for its proposed 26 per cent stake sale in Reliance Life Insurance to Japan's Nippon Life.

The company had signed a definitive agreement to sell a 26 per cent stake in Reliance Life Insurance to Nippon Life Insurance for Rs 3,062 crore earlier this year. The deal was subject to regulatory approvals.

The Insurance Regulatory Development Authority (IRDA) has already granted in-principle approval for the proposed stake sale. Following RBI clearance for the deal, IRDA will now grant final approval for completion of the transaction, Reliance Capital said in a filing to the Bombay Stock Exchange.

Commenting on the development, Reliance Capital CEO Sam Ghosh said, "We are delighted to receive the RBI approval, bringing us closer to concluding this transaction very shortly."

"This is great news as we move closer to completing the transaction," Nippon Life Insurance President Yoshinobu Tsutsui said.

This transaction pegs the total valuation of Reliance Life Insurance at around Rs 11,500 crore.

Nippon Life is a 122-year-old Global Fortune 100 company and the seventh largest life insurer in the world. It is a leading private life insurer in Asia and Japan.

R-Cap figures among the country's top-four private sector financial services and banking groups in terms of net worth.

Source: Financial Express

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Corporates welcome RBI's draft norms on banking licences

Mumbai: Welcoming the Reserve Bank's draft guidelines on granting new bank linceces, corporates and analysts on Monday said the norms would pave the way for entry of business houses into the banking space.

"We welcome the draft banking guidelines. Clearly, based on eligibility criteria, Aditya Birla Nuvo, which enjoys a significant presence across several key financial services businesses, would fit into the criteria," Aditya Birla Nuvo Chief Financial Officer Sushil Agarwal said.

Terming the paper as a well-thought out piece, analysts said the draft incorporates a lot from the consultative process held after the the discussion paper floated by the RBI in August, 2010.

"Overall, this is a good set of guidelines. They give a clear set of directions about the entry of corporates which is welcome," consultancy firm Ernst and Young's Director Viren Mehta said.

"The draft guidelines are definitely in line with the discussion paper and views expressed subsequently also have been taken into consideration," G S Sundararajan, Managing Director of finance company Shriram Capital, said.

He said the group will be analysing the details and looking if it can come up with a profitable model. The company's interest in banking continues, Sundararajan added.

"The draft guidelines contain a strong focus on greater financial inclusion, efficient corporate governance, adequate controls on exposure to group companies, and time-bound milestones for listing. We now look forward to the release of the final guidelines over the next few months," Sam Ghosh, CEO, Reliance Capital, said.

"Our group will be keen to explore a banking licence. Our long experience of two decades provides us with the necessary understanding and strength in the financial services domain," diversified conglomerate Mahindra and Mahindra's President (Finance, Legal and Financial Services) Uday Phadke said.

"What is important is that they have chosen to create a level-playing field, there is nothing there which will offend an existing player," consultancy firm PricewaterhouseCoopers' Associate Director Robin Roy said.

Source: Financial Express

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SBI went past RBI limit in sanctioning corporate loans

New Delhi: Exceeding RBI's limit on exposure to single borrower, State Bank of India sanctioned loans to corporates such as RIL, IOC, Tatas and HDFC in the past three financial years, the Lok Sabha was informed today.

Bank of India also went past the Reserve Bank limit in the last two fiscals and sanctioned Rs 2,819 crore to HDFC, over the prescribed limit of Rs 2,730 crore in 2009-10.

Besides, it gave Rs 405 crore above the limit to SIDBI.

In a written reply, Minister of State of Finance Namo Narain Meena said the country's largest lender SBI inched past the limit to Reliance Industries and Indian Oil Corporation in all the years starting 2008-09; to BHEL in 2009-10 and 2010-11 and to the Tata Group in 2009-10.

However, Meena said, "As part of financial sector liberalisation, all the credit related matters of banks have been deregulated by the RBI and are governed by the bank's own lending policies."

Banks have to consider different loan proposals as per their commercial judgement and merits of each case keeping in view the loan policies approved by the Board of Directors, he added.

Meena said SBI has informed that in exceptional circumstances RBI permitted banks to consider enhancement of the exposure to a borrower/group up to a further five percent of capital funds with the approval of the Board.

Source: Financial Express

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LIC, Franklin up stake in Reliance Industries

New Delhi: State-run insurer LIC and private fund house Franklin Templeton have hiked their stake in Mukesh Ambani-led Reliance Industries by collectively buying about 23 lakh shares, currently worth an estimated Rs 200 crore.

As per the latest shareholding pattern filed by RIL with the stock exchange today, LIC has increased its stake in the company to 7.16 per cent in the first quarter of this fiscal.

During the same period, Franklin Templeton Investment Funds hiked its stake to 1.05 per cent.

As per the quarterly shareholding disclosure, LIC's holding in Reliance Industries increased by 18.6 lakh shares during April-June period, while that of Franklin Templeton rose by about 4.3 lakh shares.

At RIL's current share price of Rs 867.10, the additional shares acquired by LIC is worth Rs 161 crore, while that of Franklin Templeton is Rs 37 crore.

The shares have been under heavy selling pressure off late and fell by 0.7 per cent at the BSE today. The stock has fallen sharply from its 52-week high of Rs 1,187, scaled on November 1, 2010. It had fallen to as low as Rs 829 on June 20, its lowest level in one year.

During the April-June quarter, the promoter holding in the company remained unchanged at 44.72 per cent, while FII stake fell marginally from 17.7 per cent to 17.37 per cent.

The holding of large individual investors also fell down from 1.03 per cent to 0.96 per cent. However, small individual investors hiked their holding in the company to 11.48 per cent from 11.44 per cent.

Large individual shareholders are those who own shares worth more than Rs one lakh, while those having shares worth less than Rs one lakh are classified as small individual investors.

All the mutual funds together held 2.53 per cent stake as on June 30, down from 2.59 per cent at the end of previous fiscal. The insurance companies' holding, however, rose from 7.87 per cent to 7.93 per cent during the first quarter.

Source: Financial Express

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