Steel minister Beni Prasad Verma opined that export duty on iron ore be hiked to 30% immediately in order to resolve the shortage of the raw material to domestic steel producers
New Delhi: Concerned over severe shortage of iron ore after the ban on mining in Karnataka, steel minister Beni Prasad Verma on Tuesday said the finance ministry should immediately increase the export duty on the raw material to 30%, reports PTI.
“If exports (of iron ore) stop, the problem of iron ore shortage in Karnataka and other states would get solved by and large,” Mr Verma told PTI in an interview.
Mr Verma had written a letter to finance minister Pranab Mukherjee two weeks ago to increase the duty by 10% to 30% to discourage iron ore exports.
In this year’s Budget, duty on exports of iron ore was increased to a uniform level of 20% on both forms of iron ore, lumps and fines, from 15% and 5% respectively.
“We want to get this (increase in export duty on iron ore) implemented immediately. I had written to them (the finance ministry) just at the beginning of the Karnataka crisis,” Mr Verma said. The continuous exports of the raw material is a big cause of concern, he added.
The government is also preparing a fact-sheet on problems being faced by steel companies. In about a week’s time, it will be presented to the Supreme Court through attorney general GE Vahanvati, Mr Verma said.
Since August, the steel and the allied industries in Karnataka are facing an acute shortage of iron ore after the apex court banned mining in the state.
The apex court later directed e-auction of 1.5 million tonnes of iron ore per month, lying in Karnataka mines, under the supervision of the court-appointed panel.
The Supreme Court also allowed state-run NMDC, the only company allowed to do mining in the state, to e-auction its iron ore as well 1 million tonnes in a month
The industries in the state, however, feel auctioning of iron ore is not helping them as the prices skyrocket during auctions, while there are no takers for low grade ore (iron ore fines).
Karnataka accounts for almost 25% of the total domestic steel production in a year. Besides, it contributed nearly 20% to the annual iron ore output.
Meanwhile, JSW Steel, which runs a 10 million tonnes per annum plant in Karnataka, has assured its customers through a public announcement that it is ‘working relentlessly’ to meet the supply requirements.
If necessary, the company would meet the demands of customers through its associate company JSW Ispat Steel, JSW Steel said, adding that its Vijayanagar plant is being run at 30% capacity.
In 2010-11, iron ore exports from the country had come down by 20% to 97.6 million tonnes (MT) vis-à-vis 117 MT in 2009-10, a data gathered by mining industry body FIMI showed.
Bankers are concerned because there is no pick up in credit and the actual disbursements happening at present are the proposals sanctioned earlier, IBA chief K Ramakrishnan said after the customary bankers’ pre-policy meeting with the RBI governor Duvvuri Subbarao and the deputy governors
Mumbai: Fearing a deterioration in asset quality and to fire up credit demand, top bankers on Tuesday appealed to the Reserve Bank of India (RBI) to pause its interest rate hike cycle that has already seen 12 hikes in the past 19 months, reports PTI.
“Bankers want a pause (to rate hikes). It goes without saying ... (and) for a longer period of time,” chief executive of Indian Banks Association, the umbrella body of banks, K Ramakrishnan, told reporters here.
The RBI is scheduled to unveil the second quarter monetary policy on 25th October.
Bankers are concerned because there is no pick up in credit and the actual disbursements happening at present are the proposals sanctioned earlier, he said after the customary bankers’ pre-policy meeting with the RBI governor Duvvuri Subbarao and the deputy governors.
“Frankly speaking, credit growth is muted. The credit growth has not been to the expectations, Capex (by companies) is virtually at a standstill, investment is not really happening,” Mr Ramakrishnan said.
However, as of 9th September, non-food credit growth logged in 20.1% or by Rs31,490 crore, according to the RBI data. But this was mostly due to the disbursals of outstanding credit orders by the petroleum, coal and nuclear sectors.
Bank of Baroda chairman and managing director MD Mallya, who also chairs the IBA, said demand for credit has been ‘muted’ and is likely to stay so for ‘some more time’.
The industry is demanding a pause and all eyes are set on what action the central bank takes on 25th October.
“There is a feeling that because of the pressure happening in the credit portfolio there is a possibility that non-performing assets can go up,” Mr Ramakrishnan said.
This will entail an increase in provisioning against doubtful assets which will eat into banks’ bottomlines over the next quarter and also affect the net interest margins (NIMs), he said.
Mr Mallya also admitted there is a pressure on asset quality, especially from the steel and textile sectors, but refrained from giving any estimate on the number.
Among those who met the RBI top echelons also included State Bank of India chairman Pratip Chaudhuri, ICICI Bank managing director and chief executive Chanda Kochhar, HDFC Bank managing director and chief executive Aditya Puri and Standard Chartered’s Neeraj Swaroop, among others. However, none of them spoke to the waiting reporters.
RBI said the banks should identify areas or aspects which, as per their assessment, require to be brought up for review. These areas may be incorporated in a policy and approved by the board or local management committee
Mumbai: Tightening regulatory norms, the Reserve Bank of India (RBI) on Tuesday asked chief executive officers of all the foreign banks to oversee their audit reviews, reports PTI.
“The reviews (placed before the Audit Committee) may be put up to the local management committee or chief executive officer (foreign bank),” RBI said in a notification addressed to chief executives of all foreign banks operating in India.
The notification also said that for all foreign banks operating in India, the CEOs would be responsible for effective oversight of regulatory and statutory compliance as also the audit process and the compliance thereof in respect of all operations in India.
RBI said the banks should identify areas or aspects which, as per their assessment, require to be brought up for review. These areas may be incorporated in a policy and approved by the board or local management committee, it added.
The notification comes against the backdrop of Rs460 crore fraud of at a branch of foreign lender Citibank.
As many as 34 foreign banks, including global leaders such as HSBC and Deutsche Bank, are operating in the country.