IRDA said copies of current passbook and current statement of bank accounts with full residential details would be considered as "officially valid document" towards identity and address in case of micro-insurance products
New Delhi: Insurance Regulatory and Development Authority (IRDA) has decided to relax the requirement of written confirmation from banks as a proof of residence for micro-insurance policy seekers from remote areas, reports PTI.
"It has come to our notice that customers in remote areas who have limited access to banking facilities have difficulty in providing such written confirmations from banks, IRDA said in a notification.
IRDA said it was observed the requirement of providing written confirmation from banks was "posing a hindrance to the financial inclusion measures".
In view of the same, copies of current passbook and current statement of bank accounts with full residential details would be considered as "officially valid document" towards identity and address in case of micro-insurance products, it added.
"...it is advised that written confirmation from banks need not be insisted upon," IRDA said in the notification.
Minimum lending rate, of HDFC Bank will come down to 9.7% from the existing 9.8% thus making loans cheaper for borrowers in new year
New Delhi: HDFC Bank has decided to cut its benchmark lending rates by 0.1%, making loans cheaper for its borrowers in the New Year, reports PTI.
The base rate, or the minimum lending rate, of HDFC Bank will become 9.7% from the existing 9.8%, sources said.
At the same time, the benchmark prime lending rate (BPLR) of the country’s second largest private bank is expected to be slashed by a similar margin to 18.20%.
The new rates would be effective from 1 January 2013, sources added.
HDFC Bank has become the first bank to cut lending rate ahead of Reserve Bank of India (RBI)'s quarter review of monetary policy on 29 January 2013. RBI has already indicated that it will consider reducing interest rate in the January review.
The central bank is closely monitoring the evolving growth-inflation dynamics and would update projections for 2012-13 in the third quarter review, RBI had said.
Looking forward, the central bank said, "the emerging patterns reinforce the likelihood of steady moderation in inflation going into 2013-14, though inflation may edge higher over the next two months".
The RBI in its December review left the short-term lending (repo) rate and the Cash Reserve Ratio (CRR) unchanged at 8% and 4.25% respectively.
The reverse repo, at which RBI absorbs excess liquidity through borrowings from banks, remained static at 7%.
HDFC Bank last reduced the benchmark lending rates by 0.2% in June.
Meanwhile, the bank also revised fixed deposit rates on select maturities from 15 December 2012.
Earlier this week, HDFC Bank raised about Rs1,400 crore from bonds to fund its business growth. The bank has allotted lower Tier II bonds for an amount aggregating Rs1,405 crore.
The bonds in the nature of debentures where issued on a private placement basis to investors.
Fertiliser Ministry has not paid the subsidy bills of about Rs25,000 crore for phosphatic and potassic fertilisers like muriate of potash and di-ammonium phosphate since July and for urea since August 2012
New Delhi: Faced with severe liquidity crunch, the Fertiliser Ministry has sought bank loans of up to Rs25,000 crore under a special banking arrangement to pay part of the mounting fertiliser subsidy bill, reports PTI.
With the fertiliser subsidy bill likely to shoot to Rs1.04 lakh crore this fiscal, the ministry has sent a proposal to Finance Ministry seeking a "special banking arrangement" to draw loan of Rs25,000 crore from banks for subsidy payments.
"The ministry is facing a shortage of funds to pay the industry's subsidy bills and has subsequently sent a proposal to Finance Ministry for a special banking arrangement so that it can draw a loan of Rs25,000 crore from public sector banks at low interest," a source in know of the development said.
Fertiliser Ministry has not paid the subsidy bills for phosphatic and potassic (P&K) fertilisers like muriate of poatsh (MoP) and di-ammonium phosphate (DAP) since July and for urea since August, the source revealed.
Another source, while confirming the ministry's move of sending a proposal to Finance Ministry, added that the subsidy bill crossing Rs1 lakh crore is not just the payments for the current fiscal.
"If Fertiliser Ministry is able to make all the payments, which total about Rs1,04,000 crore, it will have paid Rs21,000 crore inventory payment for previous years, payments for this fiscal as well as for the first quarter of 2013-14 fiscal," the source explained.
The source added that it has also been suggested in a meeting held in the Fertiliser Ministry that the ministry can ask the government to ask banks to provide loans to the industry and pay a part of the interest payments, or all of it, till the firm's subsidy payments are re-reimbursed.
"It may seem that fertiliser subsidy bill has crossed Rs1 lakh crore this fiscal, but if this is approved then the subsidy bill in 2013-14 fiscal will be much less," the source said.
A senior Fertiliser Ministry official, who refused to speak on the special banking arrangement, said that "In all probability ministry has exhausted its budgetary allocation of Rs61,256 crore and would require more funds to pay for the subsidy bills."
Meanwhile, industry-body Fertiliser Association of India (FAI) said the Indian fertiliser industry is passing through a severe liquidity problem in view of non-payment of pending subsidy bills.
"The 'on account' payment for subsidy on imported P&K fertilisers has been made up to June 2012 and for domestic P&K fertilisers, it has been paid till July 2012. The subsidy for domestic urea has been paid up to August, 2012" FAI director general Satish Chander told PTI.
In addition, there are other pending subsidy and freight bills which have not been paid for long time. Only for imported urea, which is on Government account, the payment is made up-front, he added.
"The budget allocation of Rs60,974 crore for fertiliser subsidy, as approved by Parliament, has already been exhausted.
An estimated amount of Rs19,000 crore subsidy payment is outstanding for the period till October 2012," he said.
In addition, for the remaining period of 2012-13 fiscal, that is beyond October, 2012, the estimated requirement of funds is Rs19,000 crore, Chander added.
"There is urgent need for arrangement for additional funds of about Rs38,000-40,000 crore to save the fertiliser industry from the current financial crisis and enable to continue operations and supply fertilisers to the farmers," he said.
Chander added that since the ministry has no funds for the payment of subsidy bills for this fiscal, the industry is forced to seek loans from banks.
"Under such a situation, the only hope left with the industry is to seek interim banking arrangement through which public sector banks can pay subsidy bills once they are approved by the Department of Fertilisers," he suggested.
When the subsidy amount is available with the Department, it can directly re-pay these subsidy payments made by the banks. In 2008-09 also similar arrangements were made which helped fertiliser companies to recover their subsidy under such arrangements, he said.
"The Industry is prepared to share the interest burden beyond 9%. This means the interest liability up to 9% be taken by the Government and balance by the industry," Chander added.
On an average, India consumes about 30 million tonnes of urea and around 25-26 million tonnes of DAP, MoP and complex fertilisers annually.