Following the restrictions on bank credit to non-banking financial companies the death of the commercial paper as a short-term fund source, there has been a hike in the returns these companies are offering on retail borrowings. On the one side is the rise in rates offered. This started over a month ago with Sundaram Finance — one of the largest retail borrowers from the public — which restored the interest rates for its one-year public deposits from 12.5 per cent to the RBI stipulated maximum of 14 per cent. While all companies now offer the maximum deposit interest rate of 14 per cent in tune with the RBI directive, it is the hike in “incentive rate” — a sort of splitting of the brokers’ commission with the depositor — paid upfront, that gives away the hard-sell the NBFCs are at.

RIL, Enron methane project cleared

The Centre has approved the proposal of Reliance Industries to collaborate with US based Enron Exploration to work as a consortium for undertaking coal-bed methane exploration and develop projects at selected sites in Madhya Pradesh and West Bengal. The proposal of Powergen Plc of the UK which had sought permission to set up a wholly-owned subsidiary in India which would coordinate and manage its business interests, mainly in the power sector has also been approved.

Mulayam Ministry dismissed, Mayawati to form Govt.

The Uttar Pradesh Governor, Mr. Motilal Vora, today dismissed the 18-month-old Mulayam Singh Yadav Ministry and invited the Bahujan Samaj Party Legislature leader, Ms. Mayawati, to form the Government tonight. The swearing-in, of Ms. Mayawati is scheduled at 10.30 tonight. Mr. Yadav he had lost his majority and was asked to resign.

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