Tata Motors’ Nano, the world’s cheapest car, is poised for another milestone. The company is likely to book a whopping 10 lakh cars in the first fortnight starting March 23, company sources said.
The previous best in India was Fiat Uno, which did about 2.90 lakh bookings in 1995-96.
Simply put, this means a collection of Rs 7,000 crore in a span of two weeks as booking amount for each car will be around Rs 70,000.
All dealers of Tata Motors and select branches of State Bank of India (SBI) will accept bookings simultaneously across the country.
The first batch of cars will roll out from the Pantnagar plant in Uttarakhand, which has a capacity to produce only 3,000 cars per month. Situation will ease only after the company’s Sanand plant near Ahmedabad, which will have an initial capacity of producing 250,000 cars per annum, becomes operational in one year.
A survey by Crisil suggested that Nano’s launch could expand the Indian car market by 65 per cent. The increase in the market is expected to push up car sales by 20 per cent over previous year.
Allotment will be made through a draw and, going by projections even during this recession, those at the top of the draw would have the choice of becoming proud owners of the first Nanos, or getting a premium in the black market.
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Sunday, March 22, 2009
Friday, March 20, 2009
Govt estimates 500,000 job losses in textile industry
The estimate is less than industry’s estimate by half.
The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.
The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.
The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.
“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.
However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.
This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.
Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.
“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.
The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.
About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.
While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.
The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.
The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.
The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.
“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.
However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.
This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.
Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.
“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.
The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.
About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.
While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.
Friday, February 27, 2009
Nano launch on March 23, bookings from April
After a delay of more than six months, Tata Motors will finally launch the much-awaited Nano on March 23. The Rs 1-lakh car, pegged as the world's cheapest car, will be rolled out at an event to be held in Mumbai.
However, bookings for the 'people's car' will begin only in the second week of April, the company said in a statement today.
The car was earlier scheduled to be launched in the first week of October last year. But due to protests against land acquisition for the car's mother plant at Singur in West Bengal, the company was forced to abort the production plans from that site, which disrupted the original launch plan.
Although Tata Motors did not reveal the initial production numbers of the Nano, sources say that the company will launch the car with around 1,500 units, which have been manufactured at Pantnagar in Uttarakhand and Pune in Maharashtra.
Industry sources add that the company targets to produce 100,000 units in the next twelve months from - Pantnagar, Pune and Sanand (Gujarat). The Gujarat plant is expected to commence production by October-November this year, added sources. Consumers wanting to buy the Nano may have to cough up Rs 70,000 as booking amount, which is 55-60 per cent of the total on-road cost of the car, which is expected to be at Rs 1.3-1.4 lakh after addition of various levies and taxes.
But sources say that the company will have a pricing advantage on all Nano's built at its Pantnagar plant due to a tax holiday granted to automotive companies situated there, thus allowing the company to offer the car closer to the Rs 1 lakh price tag. The company is currently manufacturing around 25 to 30 cars every day for which, spare parts, gear boxes and transmission systems are being shipped from Pune.
"Some 900 cars are already ready at our Pantnagar plant. By the time of the launch, another 600 cars are expected to be ready," said a top executive of Tata Motors from the Pune plant. Even though the company pegged March 23 as the launch date, the car will be available in showrooms only by the first week of April, clarified the company.
"Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India", stated the company release. Currently, the component vendors supplying to the Nano project are asked to moderate their supplies currently, which will be gradually hiked in the following months when Tata Motors increases production level.
"Once the Gujarat plant kicks in around October-November we will have hiked our output to the optimum level to keep pace with the production", said a vendor associated with the project.
The Gujarat plant has a capacity to produce 250,000 Nano's yearly.
The Nano was unveiled by Tata Motors amid much fanfare at the Auto Expo held at New Delhi in January last year. Violent protest by farmers led by Trinamool Congress leader Mamta Banerjee forced Tata Motors to quit from the state and relocate the plant to Sanand in Gujarat.
However, bookings for the 'people's car' will begin only in the second week of April, the company said in a statement today.
The car was earlier scheduled to be launched in the first week of October last year. But due to protests against land acquisition for the car's mother plant at Singur in West Bengal, the company was forced to abort the production plans from that site, which disrupted the original launch plan.
Although Tata Motors did not reveal the initial production numbers of the Nano, sources say that the company will launch the car with around 1,500 units, which have been manufactured at Pantnagar in Uttarakhand and Pune in Maharashtra.
Industry sources add that the company targets to produce 100,000 units in the next twelve months from - Pantnagar, Pune and Sanand (Gujarat). The Gujarat plant is expected to commence production by October-November this year, added sources. Consumers wanting to buy the Nano may have to cough up Rs 70,000 as booking amount, which is 55-60 per cent of the total on-road cost of the car, which is expected to be at Rs 1.3-1.4 lakh after addition of various levies and taxes.
But sources say that the company will have a pricing advantage on all Nano's built at its Pantnagar plant due to a tax holiday granted to automotive companies situated there, thus allowing the company to offer the car closer to the Rs 1 lakh price tag. The company is currently manufacturing around 25 to 30 cars every day for which, spare parts, gear boxes and transmission systems are being shipped from Pune.
"Some 900 cars are already ready at our Pantnagar plant. By the time of the launch, another 600 cars are expected to be ready," said a top executive of Tata Motors from the Pune plant. Even though the company pegged March 23 as the launch date, the car will be available in showrooms only by the first week of April, clarified the company.
"Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India", stated the company release. Currently, the component vendors supplying to the Nano project are asked to moderate their supplies currently, which will be gradually hiked in the following months when Tata Motors increases production level.
"Once the Gujarat plant kicks in around October-November we will have hiked our output to the optimum level to keep pace with the production", said a vendor associated with the project.
The Gujarat plant has a capacity to produce 250,000 Nano's yearly.
The Nano was unveiled by Tata Motors amid much fanfare at the Auto Expo held at New Delhi in January last year. Violent protest by farmers led by Trinamool Congress leader Mamta Banerjee forced Tata Motors to quit from the state and relocate the plant to Sanand in Gujarat.
TCS mulls variable pay cut; staff to work more
In a clear admission that it is facing hard times, India’s largest software exporter Tata Consultancy Services (TCS) said it plans to review the variable component of employees' salaries every quarter in an attempt to cut costs. Variable pay accounts for 20 to 35 per cent of TCS employees' gross salary, depending on their hierarchy.
The company had earlier cut employees' variable pay by around 1.5 per cent in February 2008.
“We are trying to reduce costs. Our largest expenditure -- around 55 per cent of our gross revenue -- is manpower cost and employee salaries. We are not contemplating a pay reduction, but we are reviewing the employee variable pay," CEO and MD S Ramadorai told reporters here today.
All employees, from trainee to the senior-most manager, get variable pay. The total variable component -- which is linked to both the performance of the company as well of the individual — accounts for around 8 per cent of the company's gross revenue.
"We are also increasing employee working hours from 40 hours a week to 45 hours a week, with effect from April 1,” he added.
The company may also defer absorbing nearly 24,500 campus recruits, scheduled to join in June. Their salaries may also be revised, said Ramadorai.
According to analysts, a 10 per cent increase in working hours could add half-a-million billable hours for TCS alone, given that over 55 per cent of the company's contracts were the Time & Material variety.
The Rs 35,000-crore TCS also expects flat or lower Q4 results because its US clients have started pressing the company for a reduction in price ranging from 4 to 15 per cent. "Q4 results will either be the same as the third quarter or may see a dip,” Ramadorai indicated.
The company also plans to delay infrastructure and new projects to save costs. "Capital expenditure of TCS in the next financial year will be less than the Rs 1,400 crore announced for 2008-09,” Ramadorai said.
The company has reportedly laid off over 100 employees in the UK. “A lot of our work is on contract. Also, we retain employees, especially the ones on probation, on performance, and if their performance is not up to the mark, we ask them to leave. Although I am not sure why the employees in the UK were asked to leave, two of the reasons could be that their contracts ended or bad performance. Going forward, a lot of emphasis this year will be on employee efficiency,” Ramadorai said.
“We are also focusing on more offshore projects right now to cope effectively with the recession, by moving more roles and delivery functions to offshore locations such as India,” Ramadorai added.
TCS serves customers such as British Airways, BT and United Utilities in the UK. The company has around 4,800 professionals working at almost 65 customer sites in the UK and Ireland.
“In the last nine months, TCS has hired 30,000 people. For now, we have frozen our lateral hiring and may look at laying off employees if the situation does not improve. Currently, we have around 1,30,000 employees on our pay roll,” Ramadorai added.
The company had earlier cut employees' variable pay by around 1.5 per cent in February 2008.
“We are trying to reduce costs. Our largest expenditure -- around 55 per cent of our gross revenue -- is manpower cost and employee salaries. We are not contemplating a pay reduction, but we are reviewing the employee variable pay," CEO and MD S Ramadorai told reporters here today.
All employees, from trainee to the senior-most manager, get variable pay. The total variable component -- which is linked to both the performance of the company as well of the individual — accounts for around 8 per cent of the company's gross revenue.
"We are also increasing employee working hours from 40 hours a week to 45 hours a week, with effect from April 1,” he added.
The company may also defer absorbing nearly 24,500 campus recruits, scheduled to join in June. Their salaries may also be revised, said Ramadorai.
According to analysts, a 10 per cent increase in working hours could add half-a-million billable hours for TCS alone, given that over 55 per cent of the company's contracts were the Time & Material variety.
The Rs 35,000-crore TCS also expects flat or lower Q4 results because its US clients have started pressing the company for a reduction in price ranging from 4 to 15 per cent. "Q4 results will either be the same as the third quarter or may see a dip,” Ramadorai indicated.
The company also plans to delay infrastructure and new projects to save costs. "Capital expenditure of TCS in the next financial year will be less than the Rs 1,400 crore announced for 2008-09,” Ramadorai said.
The company has reportedly laid off over 100 employees in the UK. “A lot of our work is on contract. Also, we retain employees, especially the ones on probation, on performance, and if their performance is not up to the mark, we ask them to leave. Although I am not sure why the employees in the UK were asked to leave, two of the reasons could be that their contracts ended or bad performance. Going forward, a lot of emphasis this year will be on employee efficiency,” Ramadorai said.
“We are also focusing on more offshore projects right now to cope effectively with the recession, by moving more roles and delivery functions to offshore locations such as India,” Ramadorai added.
TCS serves customers such as British Airways, BT and United Utilities in the UK. The company has around 4,800 professionals working at almost 65 customer sites in the UK and Ireland.
“In the last nine months, TCS has hired 30,000 people. For now, we have frozen our lateral hiring and may look at laying off employees if the situation does not improve. Currently, we have around 1,30,000 employees on our pay roll,” Ramadorai added.
Friday, January 23, 2009
Rahman notches up 3 Oscar nominations
Continuing his spectacular run, A R Rahman today became the first Indian to get three Oscar nominations for his score in British-Indian movie Slumdog Millionaire, which was also nominated for seven other categories, including best film and best director.
Rahman has been nominated for Best Original Score and the numbers ‘Jai Ho’ and ‘O Saya’ have been shortlisted for the Best Original Song. Close on the heels of the dual-language film winning four Golden Globes, including one for Rahman, earlier this month, Danny Boyle and Simon Beaufoy have been shortlisted for best director and best adapted screenplay categories, respectively.
The film also won nominations in picture, cinematography, sound mixing, sound editing and film editing. The nominations were announced at the Academy of Motion Picture Arts and Sciences’ Samuel Goldwyn Theatre by Oscar-winning actor Forest Whitaker. The awards will be announced on February 22 at Hollywood's Kodak Theatre.
This is the first time that an Indian has won more than one nomination in the history of Oscars. Reacting to the nominations, Rahman said: “I did not think it will get there. God has been really kind. And I have to really thank all the people for their prayers and their good wishes.
“Something good is happening and I am really happy about it,” he said, adding there is a kind of optimism in the film and so much of positive vibes as you leave the movie hall.
Co-director Loveleen Tandon said: “We have proved everyone wrong. It's a crazy feeling beyond words. Ten nominations is something unbelievable.” She said Rahman’s work has been awarded and the “world has finally woken up to his talent”. In the original score category, Rahman will compete with Alexandre Desplat (The Curious Case of Benjamin Button), James Newton Howard (Defiance), Danny Elfman (Milk) and Thomas Newman (WALL-E). Rahman will compete with Peter Gabriel and Thomas Newman (‘Down to earth’ from WALL-E) in the original song category. Gulzar has penned the lyrics of ‘Jai Ho’ and Maya Arulpragasam ‘O Saya’.
The romantic periodical The Curious Case of Benjamin Button, starring Brad Pitt, topped this years Oscar race with a whopping 13 nominations. The films in the race for best picture are Milk, Frost/Nixon, The Curious Case of Benjamin Button and The Reader.
Those nominated in the best director category along with Boyle are David Fincher (The Curious Case of Benjamin Button), Stephen Daldry (The Reader), Gus Van Sant (Milk) and Ron Howard (Frost/Nixon).
Rahman has been nominated for Best Original Score and the numbers ‘Jai Ho’ and ‘O Saya’ have been shortlisted for the Best Original Song. Close on the heels of the dual-language film winning four Golden Globes, including one for Rahman, earlier this month, Danny Boyle and Simon Beaufoy have been shortlisted for best director and best adapted screenplay categories, respectively.
The film also won nominations in picture, cinematography, sound mixing, sound editing and film editing. The nominations were announced at the Academy of Motion Picture Arts and Sciences’ Samuel Goldwyn Theatre by Oscar-winning actor Forest Whitaker. The awards will be announced on February 22 at Hollywood's Kodak Theatre.
This is the first time that an Indian has won more than one nomination in the history of Oscars. Reacting to the nominations, Rahman said: “I did not think it will get there. God has been really kind. And I have to really thank all the people for their prayers and their good wishes.
“Something good is happening and I am really happy about it,” he said, adding there is a kind of optimism in the film and so much of positive vibes as you leave the movie hall.
Co-director Loveleen Tandon said: “We have proved everyone wrong. It's a crazy feeling beyond words. Ten nominations is something unbelievable.” She said Rahman’s work has been awarded and the “world has finally woken up to his talent”. In the original score category, Rahman will compete with Alexandre Desplat (The Curious Case of Benjamin Button), James Newton Howard (Defiance), Danny Elfman (Milk) and Thomas Newman (WALL-E). Rahman will compete with Peter Gabriel and Thomas Newman (‘Down to earth’ from WALL-E) in the original song category. Gulzar has penned the lyrics of ‘Jai Ho’ and Maya Arulpragasam ‘O Saya’.
The romantic periodical The Curious Case of Benjamin Button, starring Brad Pitt, topped this years Oscar race with a whopping 13 nominations. The films in the race for best picture are Milk, Frost/Nixon, The Curious Case of Benjamin Button and The Reader.
Those nominated in the best director category along with Boyle are David Fincher (The Curious Case of Benjamin Button), Stephen Daldry (The Reader), Gus Van Sant (Milk) and Ron Howard (Frost/Nixon).
Monday, January 19, 2009
Ban directors from other boards: CLB on Satyam scam
The government has approached the Company Law Board (CLB) with a request that all former directors of scam-hit Satyam Computers should be banned from becoming directors in other companies in India.
“One of the provisions in the Companies Act under section 388B(1)(a) is that if CLB finds that directors have not discharged their responsibilities properly, they can be banned from becoming directors in any other company,” said a senior official in the ministry of corporate affairs.
The request was in a petition filed January 9.
The CLB is understood to be waiting for responses to be filed by all nine directors — B Ramalinga Raju, Rama Raju, Ram Mynampati, Mangalam Srinivasan, Krishna Paleppu, Vinod Dham, M Rammohan Rao, V S Raju and T R Prasad — by February 20 on Raju's disclosures.
This development explains why many former Satyam directors have started resigning from other company boards.
Former cabinet secretary TR Prasad has already resigned from the boards of GMR Infra and Taj GVK. Professor M Rammohan Rao stepped down as Dean of the Indian School of Business, the BEL board and a government panel. Vinod Dham resigned from Sasken.
“One of the provisions in the Companies Act under section 388B(1)(a) is that if CLB finds that directors have not discharged their responsibilities properly, they can be banned from becoming directors in any other company,” said a senior official in the ministry of corporate affairs.
The request was in a petition filed January 9.
The CLB is understood to be waiting for responses to be filed by all nine directors — B Ramalinga Raju, Rama Raju, Ram Mynampati, Mangalam Srinivasan, Krishna Paleppu, Vinod Dham, M Rammohan Rao, V S Raju and T R Prasad — by February 20 on Raju's disclosures.
This development explains why many former Satyam directors have started resigning from other company boards.
Former cabinet secretary TR Prasad has already resigned from the boards of GMR Infra and Taj GVK. Professor M Rammohan Rao stepped down as Dean of the Indian School of Business, the BEL board and a government panel. Vinod Dham resigned from Sasken.
Monday, January 12, 2009
Rahman wins Golden Globe for Slumdog Millionaire
Music maestro A R Rahman, who became the first Indian to win the prestigious Golden Globe Award, dedicated it to the "billion people of India," as British Director Danny Boyle's Mumbai-based saga 'Slumdog Millionaire,' bagged four prizes at the ceremony today. A Mumbai underdog's rags-to-riches story, 'Slumdog Millionaire', swept all the four categories it was nominated for, winning the best director award for Boyle, the best music score for Rahman, best screenplay for Simon Beaufoy and also in the category of best drama.
Rahman, who won the coveted prize for his music score 'Jai Ho' in the film, thanked the director and his fellow musicians in Mumbai and Chennai, besides the "billion people from India".
"Unbelievable..! I thought, I would not win, so anyways thanks to the almighty God for bringing me here... Danny Boyle, Fox pictures, all my musicians in Chennai, Mumbai,.. and the billion people from India," he said while accepting the award.
Director Danny Boyle bagged the best director award, while Simon Beaufoy won the best screenplay award for the film that starred Bollywood actors Anil Kapoor, Irrfan Khan and British Indian Dev Patel.
Bollywood superstar Shah Rukh Khan, who was at the ceremony to represent India, introduced the film to the foreign audience with 'Slumdog' actress Frieda Pinto. It is also the first Golden Globe for 52-year-old Boyle, who is expected to be among the favourites at next month's Oscars following the phenomenal success of the film at award circuits.
Rahman, who won the coveted prize for his music score 'Jai Ho' in the film, thanked the director and his fellow musicians in Mumbai and Chennai, besides the "billion people from India".
"Unbelievable..! I thought, I would not win, so anyways thanks to the almighty God for bringing me here... Danny Boyle, Fox pictures, all my musicians in Chennai, Mumbai,.. and the billion people from India," he said while accepting the award.
Director Danny Boyle bagged the best director award, while Simon Beaufoy won the best screenplay award for the film that starred Bollywood actors Anil Kapoor, Irrfan Khan and British Indian Dev Patel.
Bollywood superstar Shah Rukh Khan, who was at the ceremony to represent India, introduced the film to the foreign audience with 'Slumdog' actress Frieda Pinto. It is also the first Golden Globe for 52-year-old Boyle, who is expected to be among the favourites at next month's Oscars following the phenomenal success of the film at award circuits.
Monday, December 15, 2008
Govt banks lower home loan rates
Private banks say they’ll wait and watch.
After a week of discussions, government-owned banks today lowered interest rates on new home loans up to Rs 20 lakh.
The rate cuts, part of a government-driven initiative to provide a fillip to the struggling real estate sector, caps the interest rate on new home loans up to Rs 5 lakh at 8.5 per cent, and on loans between Rs 5 lakh and Rs 20 lakh at 9.25 per cent.
The new rates, which apply only to new borrowers, will help reduce equated monthly installments (EMIs) by Rs 185 to Rs 233 per lakh for loans of 20-year tenures.
BUILDING ON RATE CUTS
EMI (Rs per lakh) Old * New Savings
Up to Rs 5 lakh 1,101.09 867.82 233.37
Rs 5 to 20 lakh 1,101.09 915.87 185.22
* Calculations based on 12% fixed rate from State Bank of India
Banks also said they are reducing the interest rate on loans to micro enterprises 50 basis points and small and medium enterprises 100 basis points. To help these units tide over the liquidity crunch, extra credit in the form of a 20 per cent additional working capital limits will also be provided.
Private sector banks and large housing finance companies like HDFC are, however, yet to take a call on how they will respond.
Keki Mistry, managing director of HDFC, the largest player in the home loan segment, said Indian consumers do not transfer their home loans so frequently. “The interest rate for the new loans has virtually been at the same level for the last couple of months, but we have not seen any such trend,” he added.
On the possibility of a decline in the interest rate, Mistry said, “It is a function of availability of funds in the system and inflation. Since the inflation rate is coming down there is a possibility of an overall softening of interest rates.”
An Axis Bank source said the private sector lender will decide over the next two to four weeks.
"We are clearly seeing some softening of rates. Our cost of deposits, which was going up earlier, has plateaued now. Although it is difficult to predict how much we’ll cut, we may cut both lending and deposit rates across the board in the next two to four weeks," the bank executive said.
ICICI Bank said it is evaluating all options. The bank recently lowered the interest rate on new home loans up to Rs 20 lakh to 11.5 per cent.
For a home buyer who borrows from State Bank of India, which is at present offering a 20-year housing loan of up to Rs 30 lakh at 12 per cent, the saving on a loan of Rs 5 lakh will be around Rs 1,000 a month. For a loan of Rs 20 lakh, the borrower will pay more than Rs 3,500 less every month.
Elaborating on the special home loan package, SBI Chairman OP Bhatt said the scheme will be open till June 30, 2009. The loans will be offered at a fixed rate for five years after which the borrower can switch to the floating rate option without paying any charge.
Banks will also not charge any processing or pre-payment fee on home loans under the package and will bear the insurance cost on such loans.
However, existing borrowers from private sector banks will not be able to transfer their loans to public sector banks.
State-owned banks expect to disburse additional loans up to Rs 20,000 crore under the new package and by adding margin money that home owners have to pay, the amount sanctioned could touch the Rs 30,000 crore mark. SBI, a largest lender, expects to sanction loans worth Rs 6,000 crore under this package.
Over 80 per cent of home loans disbursed by public sector banks are below the Rs 20 lakh slab. According to Indian Banks' Association (IBA) data, the total housing loan portfolio of the 28 state-run banks stood at Rs 1,86,137 crore at end of September 2008.
Rates on home loans under the stimulus package could fall more if interest rates in general fall further, said IBA Chairman and head of Bank of India T S Narayanasami said.
Asked if this package was enough to boost demand, Narayanasami said banks have done their bit, and builders and real estate companies have to reduce housing prices to encourage people to buy new homes.
Besides reducing the lending rate for micro enterprises and SMEs, state-owned will set up cells to redress grievances regarding these loans, Bhatt said banks will give soft loans to these units and an ad-hoc credit of additional 20 per cent of their outstanding fund based limits to meet their working capital needs.
Currently, state-owned banks' loans to such sectors are growing at 25 to 28 per cent, Small Industries Development Bank of India's Chairman and Managing Director R M Malla said. Outstanding loans to micro, small, and medium enterprises are estimated at Rs 2,60,000 crore.
After a week of discussions, government-owned banks today lowered interest rates on new home loans up to Rs 20 lakh.
The rate cuts, part of a government-driven initiative to provide a fillip to the struggling real estate sector, caps the interest rate on new home loans up to Rs 5 lakh at 8.5 per cent, and on loans between Rs 5 lakh and Rs 20 lakh at 9.25 per cent.
The new rates, which apply only to new borrowers, will help reduce equated monthly installments (EMIs) by Rs 185 to Rs 233 per lakh for loans of 20-year tenures.
BUILDING ON RATE CUTS
EMI (Rs per lakh) Old * New Savings
Up to Rs 5 lakh 1,101.09 867.82 233.37
Rs 5 to 20 lakh 1,101.09 915.87 185.22
* Calculations based on 12% fixed rate from State Bank of India
Banks also said they are reducing the interest rate on loans to micro enterprises 50 basis points and small and medium enterprises 100 basis points. To help these units tide over the liquidity crunch, extra credit in the form of a 20 per cent additional working capital limits will also be provided.
Private sector banks and large housing finance companies like HDFC are, however, yet to take a call on how they will respond.
Keki Mistry, managing director of HDFC, the largest player in the home loan segment, said Indian consumers do not transfer their home loans so frequently. “The interest rate for the new loans has virtually been at the same level for the last couple of months, but we have not seen any such trend,” he added.
On the possibility of a decline in the interest rate, Mistry said, “It is a function of availability of funds in the system and inflation. Since the inflation rate is coming down there is a possibility of an overall softening of interest rates.”
An Axis Bank source said the private sector lender will decide over the next two to four weeks.
"We are clearly seeing some softening of rates. Our cost of deposits, which was going up earlier, has plateaued now. Although it is difficult to predict how much we’ll cut, we may cut both lending and deposit rates across the board in the next two to four weeks," the bank executive said.
ICICI Bank said it is evaluating all options. The bank recently lowered the interest rate on new home loans up to Rs 20 lakh to 11.5 per cent.
For a home buyer who borrows from State Bank of India, which is at present offering a 20-year housing loan of up to Rs 30 lakh at 12 per cent, the saving on a loan of Rs 5 lakh will be around Rs 1,000 a month. For a loan of Rs 20 lakh, the borrower will pay more than Rs 3,500 less every month.
Elaborating on the special home loan package, SBI Chairman OP Bhatt said the scheme will be open till June 30, 2009. The loans will be offered at a fixed rate for five years after which the borrower can switch to the floating rate option without paying any charge.
Banks will also not charge any processing or pre-payment fee on home loans under the package and will bear the insurance cost on such loans.
However, existing borrowers from private sector banks will not be able to transfer their loans to public sector banks.
State-owned banks expect to disburse additional loans up to Rs 20,000 crore under the new package and by adding margin money that home owners have to pay, the amount sanctioned could touch the Rs 30,000 crore mark. SBI, a largest lender, expects to sanction loans worth Rs 6,000 crore under this package.
Over 80 per cent of home loans disbursed by public sector banks are below the Rs 20 lakh slab. According to Indian Banks' Association (IBA) data, the total housing loan portfolio of the 28 state-run banks stood at Rs 1,86,137 crore at end of September 2008.
Rates on home loans under the stimulus package could fall more if interest rates in general fall further, said IBA Chairman and head of Bank of India T S Narayanasami said.
Asked if this package was enough to boost demand, Narayanasami said banks have done their bit, and builders and real estate companies have to reduce housing prices to encourage people to buy new homes.
Besides reducing the lending rate for micro enterprises and SMEs, state-owned will set up cells to redress grievances regarding these loans, Bhatt said banks will give soft loans to these units and an ad-hoc credit of additional 20 per cent of their outstanding fund based limits to meet their working capital needs.
Currently, state-owned banks' loans to such sectors are growing at 25 to 28 per cent, Small Industries Development Bank of India's Chairman and Managing Director R M Malla said. Outstanding loans to micro, small, and medium enterprises are estimated at Rs 2,60,000 crore.
Tuesday, September 9, 2008
Kunnakudi Vaidyanathan dead
Renowned violinist Kunnakudi Vaidyanathan, whose majestic bowing widened the circle of rasikas for Carnatic music, passed away here on Monday after a brief illness. He was 73.
He is survived by wife V. Bagirathi, sons V.R. Shekar, V. Srinivasan, V. Sridhar, V. Balasubramanian and daughter Bhanumathi Ramakrishnan.
Born on March 2, 1935, he trained under his father Ramaswamy Sastry. As a youngster, he accompanied stalwarts, including Ariyakudi Ramanuja Iyengar, Semmangudi Srinivasa Iyer, Maharajapuram Santhanam and Chittoor Subramanya Pillai. He also performed with legendary nagaswara vidwans such as T.N. Rajarathinam Pillai and Thiruvenkadu Subramania Pillai.
He made a mark in classical music as well as film music, and made conscious attempts to make music more accessible to the common man.
His foray into the film industry began with A.P. Nagarajan giving him a break in ‘Vaa Raja Vaa.’ From then, he gave several magical numbers and super hits that are among the eternal melodies in Tamil films.
In the film ‘Deivam,’ he had all his playback singers including Madurai Somu appear on screen.
His composition ‘Marudamalai mamaniyae murugaiyya...’ in Darbari Kanada made waves in the industry like not many songs have. Several other films such as ‘Agathiyar’ and ‘Raja Raja Chozhan,’ for which he scored music, were also phenomenal hits.
His interest in new attempts and innovations led him to work with veteran thavil vidwan Valayapatti Subramanian. They performed over 3,000 shows together which were also very successful. He also made a significant contribution to Tamil devotional music.
An able administrator, Mr. Vaidyanathan served as Secretary of the Tamil Nadu Iyal Isai Nadaga Mandram and also conducted the Thiruvaiyaru Thyagaraja Utsavam for several years.
Known for his dexterity and subtlety in handling the violin, he catered not only to the music scholar but also to the layman. His play reflected his own different moods and the demands of his audience with whom he established and enjoyed a good rapport.
He stopped accompanying vocal artistes in 1976 to concentrate more on solo concerts and was famous for his experiments on violin, which he referred to as fingering techniques.
Vaidyanathan, who had a long association with All India Radio, won several prestigious awards including the Padma Shri, Sangeeth Natak Academy award, Sangeetha Mamani and the Carnataka Isaignani award.
He also served as president of the Raga Research Centre.
Union Minister of State for Statistics and Programme Implementation G.K. Vasan expressed his deep shock and conveyed his condolences to the bereaved family.
He is survived by wife V. Bagirathi, sons V.R. Shekar, V. Srinivasan, V. Sridhar, V. Balasubramanian and daughter Bhanumathi Ramakrishnan.
Born on March 2, 1935, he trained under his father Ramaswamy Sastry. As a youngster, he accompanied stalwarts, including Ariyakudi Ramanuja Iyengar, Semmangudi Srinivasa Iyer, Maharajapuram Santhanam and Chittoor Subramanya Pillai. He also performed with legendary nagaswara vidwans such as T.N. Rajarathinam Pillai and Thiruvenkadu Subramania Pillai.
He made a mark in classical music as well as film music, and made conscious attempts to make music more accessible to the common man.
His foray into the film industry began with A.P. Nagarajan giving him a break in ‘Vaa Raja Vaa.’ From then, he gave several magical numbers and super hits that are among the eternal melodies in Tamil films.
In the film ‘Deivam,’ he had all his playback singers including Madurai Somu appear on screen.
His composition ‘Marudamalai mamaniyae murugaiyya...’ in Darbari Kanada made waves in the industry like not many songs have. Several other films such as ‘Agathiyar’ and ‘Raja Raja Chozhan,’ for which he scored music, were also phenomenal hits.
His interest in new attempts and innovations led him to work with veteran thavil vidwan Valayapatti Subramanian. They performed over 3,000 shows together which were also very successful. He also made a significant contribution to Tamil devotional music.
An able administrator, Mr. Vaidyanathan served as Secretary of the Tamil Nadu Iyal Isai Nadaga Mandram and also conducted the Thiruvaiyaru Thyagaraja Utsavam for several years.
Known for his dexterity and subtlety in handling the violin, he catered not only to the music scholar but also to the layman. His play reflected his own different moods and the demands of his audience with whom he established and enjoyed a good rapport.
He stopped accompanying vocal artistes in 1976 to concentrate more on solo concerts and was famous for his experiments on violin, which he referred to as fingering techniques.
Vaidyanathan, who had a long association with All India Radio, won several prestigious awards including the Padma Shri, Sangeeth Natak Academy award, Sangeetha Mamani and the Carnataka Isaignani award.
He also served as president of the Raga Research Centre.
Union Minister of State for Statistics and Programme Implementation G.K. Vasan expressed his deep shock and conveyed his condolences to the bereaved family.
Tuesday, September 2, 2008
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