RBI to issue 20 and 50 rupee notes with new rupee symbol

The design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series 2005 issued earlier, except for rupee symbol

Mumbai: The Reserve Bank will soon issue Rs20 and Rs50 notes with the rupee symbol, reports PTI.

“The Reserve Bank of India will shortly issue of Rs20 and Rs50 denomination Banknotes without inset letter and with (Rupee) symbol...bearing the signature of D Subbarao, Governor, RBI,” the central bank said in a statement.

The design of these notes to be issued now is similar in all respects to the banknotes in Mahatma Gandhi Series 2005 issued earlier, except for rupee symbol, RBI added.

The Indian rupee got a unique symbol -- a blend of the Devanagri 'Ra' and Roman 'R' -- in 2010, joining currencies like the US dollar, euro, British pound and Japanese yen in having a distinct identity.


MRPL shuts down two-third of refinery due to water shortage

Operations at the Mangalore refinery would be impacted till arrival of monsoon rains

New Delhi: Mangalore Refinery and Petrochemicals Ltd (MRPL) said it has shut down two-third of its 15 million tonne refinery in Karnataka due to shortage of water, reports PTI.

MRPL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), in a regulatory filing said operations at Mangalore refinery would be impacted till arrival of monsoon rains makes up for stoppage of water supply to the plant from the nearby Nethravathi river.

“The refinery was receiving around 5.5 million gallons a day (mgd) water from Nethravathi river. Water availability in the Nethravathi river and its downstream dams started depleting from the end of March. As a result the district authorities enforced reduction of water supply to MRPL to one-third level and finally on 11 April 2012, completely stopped the intake of water from the Nethravathi river,” the company said.

MRPL has three crude units -- Phase I of 4.68 million tons, Phase II of 7.14 million tons and Phase III of 3 million tons -- and supplies oil products in southern states. The shutdown would lead to shortage of supply of products to MRPL fed locations. MRPL said it had reserve water to meet just one-and-a- half days of full load operation of the refinery.

“In order to overcome the situation and pulling on the resources for next couple of days till rainfall starts, it has been decided to shut down the Phase-I and Phase-II units with immediate effect,” it said adding the company continues to watch the situation and would initiate necessary action as deemed fit from time to time.

“There will be shortage of supply of products to MRPL fed locations,” it said.

Further, MRPL may have to incur additional demurrage on account of delay in unloading crudes because of ullage problem and loading of products.


Japan’s Mitsui Sumitomo buys 26% stake in Max New York Life for Rs2731 crore

In an all cash transaction, Mitsui Sumitomo Insurance will pay Rs2,731 crore for the 26% stake in Max New York Life

New Delhi: US-based New York Life said it will exit from its Indian life insurance business venture--Max New York Life-- by selling its entire 26% stake to Japanese Mitsui Sumitomo Insurance at Rs2,731 crore cash, a deal dubbed as the second largest in insurance sector, reports PTI.

In an all cash transaction, Mitsui Sumitomo Insurance (MSI), a unit of Mitsui Sumitomo & Aioi Dowa (MS&AD) Group of Japan will pay Rs2,731 crore for the stake in Max New York Life (MNYL) subject to regulatory approvals.

“The transaction values Max New York Life at Rs10,504 crore ($2.1 billion). The consideration offered by MS&AD reflects the strong confidence in the company and its superior performance,” Max India chairman Analjit Singh said.

This is the second largest deal in the Indian insurance sector after Reliance Life, which sold its 26% stake to Japanese insurer Nippon Life at about Rs3,062 crore last year. As per existing regulation, a foreign partner can hold only up to 26% stake in an insurance joint venture.

Post the transaction, Max India's majority stake will remain unchanged at 70% but the company will be renamed as Max Life Insurance Company (Max LIC), Mr Singh said.

 Under a complex agreement entered into by the firms, New York Life will sell 16.63% of its holding to MSI. The remaining 9.37% would be sold to Max India for Rs182 crore. Max India will then sell the 9.37% stake to MSI for Rs984 crore.

Asked why the deal has been structured in a two-phased manner, Max India, managing director Rahul Khosla said: “Obviously from our perspective there are worthwhile tax advantages in doing so. We are able to sell shares in such a way that from tax submission perspective, they make more sense for what tax rates are applied.”

There is an overall tax benefit of Rs879 crore, Khosla said, adding, “We are doing this because this is the most effective way to do it. We have a separate buy transaction, a separate sell transaction. So, a pre-tax cash benefit of Rs879 crore (will) accrue.” Out of this, Max India will get a net cash flow of Rs802 crore and Rs77 crore as brand fee.

The cash generated from the arrangement will enable Max India to invest in growth opportunities, Mr Khosla added.

Announcing its exit, New York Life Insurance chief financial officer Michael Sproule said, the company was taking the step as it needed to focus on its North American business. New York Life Insurance in the recent past exited from many other countries, including China, Thailand and Korea, as part of a strategic decision.
New York Life will get Rs1,852 crore for its 26% stake.

MNYL incorporated in 2000 is capitalised at Rs2,126 crore. The insurance firm posted statutory profits of Rs283 crore in 2010-2011 and about Rs800 crore in the last fiscal. It currently has about Rs17,000 crore of assets under management. Singh claimed MNYL is amongst the top 4 private life insurers in India with 8.6% market share of the private life insurance market.

MS&AD is the seventh largest non-life insurance company globally, with a market cap of $12.6 billion.

There will not be any change in the top management but there could be professionals joining at the middle management from Mitsui Sumitomo Insurance, Singh said.

MNYL has a solvency ratio of 539% per cent as on 31 December 2011, which is significantly above the statutory requirement of 150%, Sud added.


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