Sebi to do away with badla post-rolling settlement

The Securities & Exchange Board of India (SEBI) will do away with all forms of carryforward trading (badla) in the capital market once rolling settlement is introduced on July 2, 2001. According to SEBI chairman DR Mehta, the board is expected to take a decision on the recommendation of the committee headed by JR Varma, SEBI board member, on rolling settlements.

The Varma committee recommended doing away with approved deferral products like ALBM, BLESS, MCFS, CFRS, ALBRS, CNS for all the scrips from July 2, 2001. Simultaneously, SEBI will introduce additional derivative products in individual stock derivatives. SEBI already has a phased programme for introduction of additional derivative products. In line with the same, SEBI and the exchanges should work towards introduction of individual stock derivatives, viz options/futures in selected stocks from July 2, 2001.

The SEBI panel's announcement recommending a ban on carry-forward trading took brokers by surprise and caused panic selling.According to brokers, if the ban is implemented by the Securities and Exchange Board of India, it would squeeze the liquidity in a market that has already been hurt by falling volumes.

More concessions announced for taxpayers

Finance Minister Yashwant Sinha proposed changes in tax proposals that included several sops to tax payers besides announcing several excise and customs duty concessions for the industry.

The most important changes have been made in the standard deduction on income tax. The standard deduction has now been raised to Rs 30,000 for income up to Rs 1,50,000 per annum. For those earning more than Rs 1,50,000 but less than Rs 3,00,000 per annum, the standard deduction has been raised from Rs 20,000 to Rs 25,000. For those earning between Rs 3 and Rs 5 lakh per year, the standard deduction will remain Rs 20,000.

In other changes, Mr Sinha has increased the customs duty on completely made cars from the existing 35 % to 60 %. He also extended the16% excise imposed on branded garments to unbranded garments.

Goenka is new president of CII

RPG Enterprises Vice-Chairman Sanjiv Goenka and Chairman and CEO of Mind Tree Consulting, Ashok Soota, took over as President and Vice-President respectively of the Confederation of Indian Industry (CII) .

Goenka was instrumental in building up the highly professional RPG group with a diversified portfolio. RPG Enterprises is one of the top industrial houses in the country with a turnover of Rs 6,400 crore.

Reliance Petro to launch a $1 bn ADR/GDR issue

Reliance Petro has approached the government for permission to launch up to $1 bn ADR/GDR issue in one month's time. The issue is part of Reliance Industries' plan to divest 13%of its stake in RPL. RPL plans to list on the Luxembourg or New York or both exchanges. This is the first instance of a corporate availing of two way fungibility since it was allowed. At current prices, RIL's 13% stake is expected to yield Rs. 3024 crore.

IDBI to be converted into a Bank

The finance ministry is toying with idea of swerving around to the idea of merging IFCI with a bank while IDBI will be converted into a bank.

The IDBI has resisted tooth and nail the merger proposal because it feels that merger with IFCI will lead to it being downgraded, making funds dearer. The IFCI’s massive non-performing assets (NPAs) and workforce were also a matter of concern. In addition to a capital infusion of Rs 400 crore to shore up IFCI's capital adequacy ratio (CAR), it called for induction of a strategic partner.

The IDBI, on the other hand, is planning to convert itself into a bank in its struggle for survival. The one-man MB Athreya panel had recommended transformation of the term lending institution into a bank and reduction of the Centre's stake in it, currently pegged at 58.47 per cent.