The Hindu Business Line : Weekly News Round up

The Bombay High Court has asked Reliance Industries to supply 28 million metric standard cubic metres per day of gas from its Krishna-Godavari basin to Reliance Natural Resources Ltd for $2.34 per million metric British thermal unit. The pricing was the bone of contention as the Mukesh Ambani-promoted Reliance Industries went by the figure of $4.2 per million metric British thermal unit decided by the Empowered Group of Ministers. The Court also asked Reliance Industries to enter into a gas supply agreement in a month with Reliance Natural Resources Ltd for 17 years.

The board of State Bank of Indore on Friday passed a resolution paving the way for its merger with the SBI. Currently, the SBI holds 98.05 per cent stake in State Bank of Indore, which is the smallest associate bank. In a corresponding move, the SBI board that met in Mumbai passed a resolution to merge State Bank of Indore with the parent bank. This will be the second associate bank of the SBI - after State Bank of Saurashtra in July 2008 - to be consolidated with the parent. The employees of State Bank of Indore will go on a "protest strike" on June 22, Mr C. H. Venkatachalam, General Secretary of the All India Bank Employees Association, told Business Line.

The annual Wholesale Price Index-based inflation rate turns negative during first week of June, the first time in well over three decades, mainly on account of a statistical base effect. The WPI fell to a minus 1.61 per cent during the week ended June 6, sharply below previous week's annual rise of 0.13 per cent. The decline in the inflation rate during the latest reported week was primarily due to a dip in prices of fuel and power.

The merger of Catholic Syrian Bank with Federal Bank is expected to be through in a month. According to reliable sources close to the deal, the boards of directors of both the banks will meet in a month's time to give their consent. The acquisition price will be fixed then. Federal Bank has 4.99 per cent stake in the privately-held Catholic Syrian Bank. The other largest shareholder in CSB is Thailand-based NRI, Mr Surachan Chawla, with a 21 per cent stake.

Japanese financial services group Nomura has agreed to pick up a 30.5 per cent stake in LIC Mutual Fund for around Rs 227 crore. The deal values the Indian company at over Rs 700 crore. Mr R. R. Nair, Director and Chief Executive, LIC Housing Finance, told Business Line that the Japanese firm plans to take its stake up to 35 per cent. LIC HF, which holds 39.3 per cent stake in LIC Mutual Fund, will sell 19.3 per cent to Nomura for Rs 138 crore, while GIC Housing Finance will sell its entire 11.2 per cent stake for Rs 89 crore.

The Union Cabinet recommended to the President, Ms Pratibha Patil, that the Budget session of Parliament be convened from July 2. The Budget session is expected to end on August 7. The Finance Minister, Mr Pranab Mukherjee, will present the General Budget for 2009-10 on July 6. The Railway Budget would be presented on July 3, an official release issued after the Cabinet meeting said.

State Bank of India announced an across-the-board 25 basis point cut in deposit rates effective June 15. Following the cut, a one-year fresh fixed deposit with SBI will fetch 6.25 per cent against 6.50 per cent earlier interest and the popular 1,000-day deposit scheme will earn 7.50 per cent against 7.75 per cent. This is the third cut in deposit rates by SBI in the current fiscal; rates were cut by 25 and 50 basis points each in April and May.

Compiled by M J Madhavan
Podcast A Srirengarajan