This Week ET News

Ridhi Sood

Loans set to pinch more as RBI hikes repo rate 25 bps

• LOANS for corporates and individuals are set to be costlier soon while deposits may yield higher returns as the Reserve Bank of India, or RBI, raised interest rates higher than expected to tame inflation. 

• The central bank raised the repo rate—the rate at which it lends to banks—by 25 basis points to 6%, and the reverse repo rate—at which it absorbs funds from banks—by 50 basis points to 5%, prompting lenders to review the rates they charge both retail and corporate customers.

This narrowing of the differential between the two policy rates is now expected to ensure greater stability in the call money market, where banks either borrow or lend overnight.

  According to Finance minister Mr Pranab Mukherjee, (the

RBI move) is in the right direction because now the corridor has been narrowed down and still inflationary pressure is there in the system.

Tata Steel supports profit sharing vision in new mining bill

• Tata Steel Vice-Chairman said that the company will share profits of mining with people affected by projects.

• He said that activities carried out by a company around a mine should also be considered as a cost before calculating profit.

• A Group of Ministers, headed by Finance Minister Pranab Mukherjee, yesterday reached a consensus to give a go- ahead to the draft mining bill, which seeks that miners share 26 per cent of profits with local people who get affected by their projects.         

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He said mineral policies should be formulated for long term such as 40-50 years and was also in favor of large scale mining for long- term economic and environmental viability.

According to him, Companies should join for joint large-scale mining. Majority of international mining is large-scale and it needs government intervention to do this .    

Bajaj Hindusthan to invest Rs 10,000 cr in thermal power

Kushagra Bajaj-promoted Bajaj Hindusthan, the country’s biggest sugar producer, plans to invest up to Rs 10,000 crore to set up 1,980-Mw thermal power capacity in Uttar Pradesh.

The company already has an MoU in place with the state government for setting up thermal power capacity of 2,430 Mw.

Bajaj Hindusthan has tried to diversify into segments like bagasse-based particle board and medium-density fibre (MDF). It has set up three plants to manufacture 50,000 cubic metres of particle board .

The purpose behind the diversification is to insulate and cushion from uncertainties in the sugar business. Sugar has been a politically-sensitive commodity in India and attracts regular policy intervention, both at the Central and state levels.

Genpact all set to enter West Asia to serve local clients

Genpact, the country’s largest business process outsourcing (BPO)

company, is spreading its wings to West Asia.

The company is exploring Egypt,

Jordan and Lebanon for setting up centres to serve local clients.

N V Thiagrajan,Chief operating officer of Genpact said that We have customers in financial services in West Asia because of our relationship with GE.

Egypt is a good option because it has an old and great education system, along with a good English, French and Arabic speaking population.

The company has inked a contract with Sabic, a Saudi Arabian chemicals company, to manage its analytics and supply chain services. It has also signed contracts with two clients in the financial services sector in West Asia.

SAIL’s JV with Posco for Bokaro plant by Nov, says Virbhadra

• STEEL Authority of India, or SAIL’s plans for a joint venture with Korea’s Posco to build a 3 million tonne plant at Bokaro, would be ready by November, while it expects a similar venture with Japan’s Kobe Steel to take another two months, Union steel minister Veerbhadra Singh said on Saturday. 

•  “While SAIL would like to have a majority partner in the venture with Posco, we are keeping an open mind on the equity aspect,” said Mr Singh. “It could be 51:49 or 50:50. We could also look at options like owning 49% each with the remaining stake held by others.

• Our main idea of the joint venture is to bring in the technology which has been patented by Posco.

• Steel minister Virbhadra Singh flanked by SAIL chairman C S Verma (left) and Coal India chairman Partha Bhattacharyya (right) during a national seminar in Kolkata on Saturday.

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