HPCL suspends jet fuel sales to Kingfisher Airlines

“Kingfisher is on cash-and-carry. We had payments from the airline (to cover for aviation turbine fuel sales) till this morning. They did not make any payments, thereafter, so supplies have been cut at all major airports,” an HPCL official said

New Delhi: State-owned oil marketing company Hindustan Petroleum Corporation (HPCL) on Thursday suspended jet fuel sales to Kingfisher Airlines after the private airline failed to pay up for its fuel purchases, reports PTI.

“Kingfisher is on cash-and-carry. We had payments from the airline (to cover for aviation turbine fuel sales) till this morning. They did not make any payments, thereafter, so supplies have been cut at all major airports,” said a company official.

HPCL sells some Rs7-Rs8 crore worth of jet fuel or ATF to Vijay Mallya-owned airline. Kingfisher, which had run an outstanding debt of Rs634 crore, was last year put on cash and carry. It pays cheque for day's purchase of ATF after which HPCL refuels its aircrafts.

But the airline had not paid anything for purchases made on Thursday and those to be made on Friday.

“Kingfisher’s outstanding (debt) is covered by a bank guarantee of Rs550 crore and a corporate guarantee of Rs200 crore. But they have to pay to buy fuel which they haven’t and so further supply was cut,” the official said.

No immediate comment was available from Kingfisher.

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RBI announces standard rating symbols for banks

The change in rating symbols and definitions, however, does not effect, in any manner, the rating methodology followed by the credit rating agencies (CRAs) for rating such instruments and will have no bearing on the existing ratings assigned by the CRAs under the Basel-II framework, the RBI said in a statement

Mumbai: The Reserve Bank of India (RBI) on Thursday announced uniform and standard rating symbols to be used for indicating financial health of a bank, reports PTI.

The change in rating symbols and definitions, however, does not effect, in any manner, the rating methodology followed by the credit rating agencies (CRAs) for rating such instruments and will have no bearing on the existing ratings assigned by the CRAs under the Basel-II framework, the RBI said in a statement.

Under the revised standardised system, there is no change in the long term rating symbols except that they will henceforth display the rating agency’s name as a prefix, it said.

“In case of short term ratings, a rating scale denoted by ‘A’ on a scale of ‘1’ to ‘4’ (i.e. A1, A2, A3 and A4) and ‘D’ has been prescribed,” it said.

Four domestic CRAs namely CARE, CRISIL, FITCH India and ICRA have been accredited for the purpose of risk weighting the banks’ claims for capital adequacy purposes.

The long term and short term ratings issued by the chosen domestic credit rating agencies have been mapped to the appropriate risk weights applicable as per the standardised approach under the Basel II framework.

In June this year, capital market regulator Securities and Exchange Board of India (SEBI) had asked CRAs to adopt standard symbols and definitions to help investors to understand better the financial health of firms.

The four accredited CRAs, which are registered with SEBI, have therefore revised their rating symbols of long term and short term debt instruments.

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Ulip holders to get interest if they discontinue policies

The IRDA also asked the life insurers that the policyholders Ulips should be allowed to revive their cover within two years of stoppage of premium payment, but not later than the expiry of lock-in period

New Delhi: Holders of unit-linked insurance policies (Ulips) who discontinue their policies mid-way shall get a minimum guaranteed interest at par with State Bank of India (SBI) savings bank account rates, reports PTI quoting the Insurance Regulatory and Development Authority (IRDA).

Changing the rules, the IRDA also asked the life insurers that the policyholders Ulips should be allowed to revive their cover within two years of stoppage of premium payment, but not later than the expiry of lock-in period.

“The policyholder shall have the right to revive such policy within two years from the date of discontinuance and not later than the expiry of lock in period,” IRDA said in a circular to all life insurance companies.

Elaborating on the interest rates to be paid on the discontinued policies, the IRDA circular said that proceeds of such policies means “... subject to a minimum guarantee of interest as applicable to savings bank account of the SBI”.

Further, the policyholders would be duly compensated for the discontinuation charges in case the policies are revived.

The compensation would be on the basis of the Net Asset Value (NAV) of the units of a common fund which is created out of the discontinuation charges and premium paid.

The regulator has also asked the insurance companies that the segregated fund relating the discontinued policies shall be invested in a pattern to be approved by IRDA.

When a policy is stopped mid-way, the insurers will be able to levy only discontinuance and fund management charges.

“No other charges, by whatsoever name, shall be levied,” the IRDA said.

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