Money & Banking
RBI announces swap facility for expansion of export credit

Under the swap arrangement, a bank can buy US dollars up to its eligible swap limit from the RBI and further sell the same amount of dollars at the prevailing market rates for swaps of a similar tenor

 

Mumbai: With an aim to help the country’s exporters get better credit, the Reserve Bank of India (RBI)  announced a special scheme to allow banks refinance their export credit positions through a dollar-rupee swap facility of up to $6.5 billion, reports PTI.

 

While the individual limits of banks for availing this facility would be intimated to them separately, the RBI said that the swaps for rupee refinance of export credit of all the banks together would be capped at $6.5 billion (about Rs35,420 crore).

 

Announcing the facility, the RBI said “scheduled banks (excluding Regional Rural Banks—RRBs) will have the option to access rupee refinance to the extent of the swap with the Reserve Bank under a special export credit refinance facility”.

 

The special export credit refinance facility—US Dollar-Rupee swap—will support incremental pre-shipment export credit in foreign currency (PCFC) and would be available to all scheduled banks, excluding RRBs.

 

Banks can tap this facility for a period of over five months, from 21st January till 28 June 2013 for fixed tenor of three or six months.

 

Under the swap arrangement, a bank can buy US dollars up to its eligible swap limit from the RBI and further sell the same amount of dollars at the prevailing market rates for swaps of similar tenor.

 

“At the end of the swap term, the bank will exchange with the Reserve Bank, the US Dollars against the rupees,” the central bank said while adding that its decision on pricing of the swap would be final.

 

This swap facility, RBI said, has been done “with a view to further enhancing the flow of credit to the export sector”.

 

RBI said the banks have the option to access rupee refinance under the special export credit refinance facility for which promissory notes will need to be fully backed by eligible export bills under the PCFC.

 

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Ambuja seeks shareholders nod for paying higher technology fee to Holcim

Ambuja Cements had paid around 0.7% of its annual sales to Holcim as technology and know-how fee in the previous two years

 

New Delhi: Ambuja Cements has sought approval of its shareholders for paying 1% of its net annual sales as "technology and know-how fee" to its Swiss parent Holcim, reports PTI.

 

"The Board has decided to seek the shareholders' approval in this regard, by way good corporate governance practise, although this matter is within the powers of the Board and strictly does not require shareholders' approval," the company said in a BSE filing.

 

"Accordingly the company is moving an ordinary resolution through a postal ballot to enable larger participation by the shareholders in the voting process," it added.

 

Ambuja Cement's Board had approved the proposal at a meeting on 13th December and on 17th December, a technology and know-how pact was signed between Ambuja and Holcim Technology, subject to the approval of the shareholders.

 

"The agreement is for five years. The fee shall be paid on quarterly basis and will remain firm for the first two financial years - 2013 and 2014 and shall be reviewed by the Board before the end of the financial year 2014," Ambuja said.

 

Holcim, as part of value creation for all of its operating companies globally, keeps developing and updating its knowledge base and continues research and studies to ascertain best benchmarks, the statement added.

 

Ambuja Cements had paid around 0.7% of its annual sales to Holcim as technology and know-how fee in the previous two years, sources said.

 

In 2011, it had clocked Rs8,602.89 crore revenue. Holcim holds a little over 50% stake in Ambuja Cements.

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Hero MotoCorp workers seek up to Rs18,000 hike in monthly wages over three years

Nearly 1,200 permanent workers of Hero MotoCorp are observing silent protest by wearing black badges and not taking tea and snacks provided by the company to press for their demand

 

New Delhi: Workers at two-wheeler major Hero MotoCorp's Gurgaon plant have demanded a hike in monthly wages of up to Rs18,000 over a three-year period, which is nearly three times higher than what the company is offering as part of a wage settlement agreement, reports PTI.

 

The nearly 1,200 permanent workers, under the aegis of Hero MotoCorp Workers Union (HMCWU), are observing silent protest by wearing black badges and not taking tea and snacks provided by the company to press for their demand.

 

They have, however, ruled out going for any strike or slowdown in production in immediate future as negotiations with the company management is going on since August 2012.

 

"We are asking for a hike of about Rs15,000-Rs18,000 per month spread over a period of three years as cost of living in the National Capital Region (NCR) is very high. However, the management is offering us around Rs6,500, which was the hike for Dharuhera plant's workers during the three-year agreement signed in 2011," HMCWU President Kawalpreet Singh told PTI.

 

The union had submitted its demand in August last year and its representatives have been holding negotiations with the management since then, he added.

 

When asked if the workers would resort to strike, Singh said: "At present we are protesting very peacefully and silently by wearing a black badge while coming to work and we are not accepting company's tea and snacks. We do not have any plan to go for strike or slowing the output in near future."

 

He, however, said if the company does not pay heed to workers' demand, the union will decide its future course of action accordingly.

 

When contacted, a Hero MotoCorp spokesperson said: "We have been holding talks with members of the Union at our Gurgaon plant in an amicable and friendly atmosphere... Hero MotoCorp has always given top priority to the overall welfare and well-being of all our workers."

 

The company spokesperson, however, declined to share specific details with regard to the ongoing talks until both parties reach an amicable conclusion.

 

"In keeping with our impeccable past record and our leadership status in the industry, we will take prudent, well-deliberated and sensible decision for the mutual satisfaction of everyone concerned and indeed for the larger good of the industrial environment in the region," he said.

 

Although the spokesperson declined to share details of current salaries of the workers, industry sources said the average gross salary of a worker at Hero MotoCorp's Gurgaon plant stands at around Rs46,000 per month.

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