Swiss banks offer to tax Indian clients

New Delhi: Pressed hard for giving access to details of money stashed away by Indians and other overseas clients with them, Swiss banks have offered to tax this wealth on behalf of the respective foreign governments.

India, where there have been long-running demand for concrete actions to bring back the black money lying in highly secretive Swiss banks, will begin talks in December for a new tax treaty with Switzerland so that it could get details about the defaulters.

Besides India, a number of other countries are also said to be looking at similar treaties, while the US recently reached an agreement for giving access to close to 4,450 bank accounts of Americans with Swiss banking major UBS.

As an alternative to the information exchange, Swiss banks have mooted the idea of a 'universal withholding tax' --wherein they would tax the earnings generated from the wealth of foreigners deposited with them and transfer the proceeds to the government of the concerned country -- and is currently discussing the same with the relevant authorities.

When asked about the proposal and its applicability to the wealth deposited by Indians in Switzerland, Swiss Bankers Association's Head of International Communications James Nason said from Basel: "We are in contact with the Swiss authorities about the proposal so it would be premature to publicise more details for the moment."

Air fares likely to go up as AI stir deepens

MUMBAI/NEW DELHI: A decision by Air India management to restore productivity linked incentives (PLI) of 7,000 of its employees failed to pacify

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the striking pilots, heightening the possibility of an increase in air fares in some of the country’s busiest routes.

More than 30 flights, including six international ones, were cancelled as Air India’s pilots reported sick for the second day running. “The fares could jump by up to 10% if the strike continues as many people are looking to rebook their tickets,” said a travel agent, requesting anonymity.

Executive with a private airline said private airlines would see an increase in bookings if the strike continues beyond the weekend. He also predicted a 5-10% hike in fares.

Air India’s executive pilots have been on sick leave since Friday midnight after the airline board approved a 25-50% cut in PLI for nearly a fourth of its 31,000 employees. Expat pilots and members of the Indian Commercial Pilots’ Association were spared the cut. Air India said the airline would resume normal operations on Monday. However, captain VK Bhalla, a senior executive pilot leading the agitation, said the strike will continue. “Our chief (Air India chairman and managing director Arvind Jad-hav) is playing a game by inviting only one group of pilots in Mumbai for talks,” he said.

India will build Ford's Figo

NEW DELHI: American carmaker, Ford Motor, plans to make India its manufacturing hub for its small car Figo it showcased on Wednesday for the Asia

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Pacific market. Ford has targeted 2 lakh cars for India by 2010. After unveiling the Figo in Delhi, Ford’s president and CEO Alan Mulally said: “The global market is shifting towards smaller cars and India has a predominant advantage with a 70% market for compact cars. With Figo, we plan to get a larger chunk of the premium hatchback market, both in India and overseas.”

“Our plan for India involves accelerating development of fuel-efficient small cars. The small car market in India will double in the next one decade,” said Mr Mulally. He, however, ruled out plans to compete with Tata Motors’ Rs 1-lakh car the Nano and Maruti Suzuki’s M800 in the near future.

Figo, Italian for “cool” will be launched in the first quarter of 2010 and come in both petrol and diesel variants. Ford India has not announced any price but the car is expected to cost Rs 4 lakh and upwards for the base variant and will be pitted against Maruti Swift and Ritz, Fiat Punto, Chevrolet U-VA and Hyundai I20.

ADB upgrades India's growth forecast to 6%

New Delhi:

• Multilateral lending agency Asian Development Bank has revised upwards India's growth projection to 6 per cent for the current fiscal on account of rising business confidence but warned that inflationary pressure would continue.

• "Emerging signs of a recovery in private business confidence and a continued large fiscal stimulus announced in the July 2009 budget helped bolster India's projected economic expansion to 6 per cent this year, upgraded from 5 per cent in March," ADB said in its update on Asian Development Outlook 2009.

• India, it added, would be able to clock 7 per cent growth rate during 2010-11. Country's growth rate slipped from 9 per cent to 6.7 per cent in 2008-09 on account of the impact of the global financial crisis.

• Projecting an inflation of 4-5 per cent by March 2010, the ADB said, "inflationary pressures are likely to persist, driven by high food prices and expansionary monetary and fiscal policies."

• The inflation has turned positive for the week ended September 5, after remaining in the negative zone for about three months.

• Rising food inflation, ADB said, would create a dilemma for the monetary authority which is currently engaged in combating the impact of the financial meltdown by following easy money policy.

PNB looking to pick up stake in Kazak bank

New Delhi: The country's second largest lender, Punjab National Bank, is in the process of picking up a stake in a small Kazak bank, Metrokombank.

PNB has been looking for acquisition in the oil-rich Central Asian state. Sources said the talks are at a very preliminary stage as several things need to be looked into, including regulatory approval.

For, the minimum capital requirement for opening a bank in the country is high. The current volume of trade between India and Kazakhastan also does not warrant this kind of investment. Therefore, buying stake in a small bank is a viable option, the sources said.

PNB currently has a representative office in Almaty.

The bank, which is present in 8 countries, is planning to open few overseas offices, including a branch each in Shanghai, Dubai and some place in Norway.

It is also looking to set up a subsidiary in Vancouver, Canada, and a joint-venture in Bhutan.

Recently, the bank increased its branches by one each in Hong Kong and the UK.

LIC to recruit over 2-lakh agents

Life insurance major, LIC, is planning to recruit more than 2-lakh agents by the end of this financial year, a top company official said.

"We plan to recruit 2-lakh agents-plus in this financial year. So far, we have recruited close to 80,000 agents in this fiscal," Life Insurance Corporation of India's Chairman, T S Vijayan, said.

Presently, the company has 13.5-lakh agents, he said.

LIC is also targeting a growth of 19 per cent in fresh premium collection in FY 10.

The company collected a premium of Rs 1,57,000-crore in the last fiscal.

Going forward, LIC expects a new premium mix of 50:50 between ULIPs and Traditional products, he said.

Indian Oil Corp losing Rs 79 cr per day

New Delhi: State-run Indian Oil Corp (IOC), the nation's largest fuel retailer, is losing about Rs 79 crore per day on selling auto and cooking fuel below cost.

"International oil prices have softened a bit, resulting in a marginal reduction in our under-recoveries on petrol, diesel, domestic LPG and kerosene," an IOC official said.

IOC and sister PSUs - HPCL and BPCL, who have been barred by the government from revising fuel prices to keep inflation under check, calculate the desired selling price for petrol and diesel on 1st and 16th of every month based on the previous fortnight's average global oil price.

The three firms currently lose Rs 3.63 per litre on petrol and Rs 2.33 a litre on diesel. These are lower than Rs 4.69 per litre loss on petrol and Rs 3.09 a litre on diesel they suffered in the first fortnight of September.

"IOC lost Rs 90 crore per day on fuel sales in the first fortnight of September. This has come down to Rs 79 crore a day from today," the official said.

On domestic LPG and kerosene, the desired price of which is calculated on a monthly basis, the three firms make a loss of Rs 158.55 per 14.2-kg LPG cylinder and Rs 17.15 on every litre of kerosene sold.

"At current oil prices, IOC will end the fiscal with a revenue loss of Rs 23,510 crore and the industry (IOC plus BPCL and HPCL) will see a revenue loss of Rs 41,440 crore," he said.

SBI upbeat on foreign expansion; to scale up Singapore Ops

• The country's largest lender, State Bank of India, has chalked out strategies to grow aggressively in overseas markets, especially Singapore, in this fiscal, a top SBI official said.
• This would help the Indian banking behemoth to move a step closer to consolidate its position in the global financial services industry.
• SBI is in advanced stages of setting up offices in the Middle East, South Africa, Saudi Arabia, the UK and Hong Kong, and would mainly focus on corporate banking and project financing in these locations, the official told.
• In Singapore, where it currently have six branches and five ATMs, SBI would increase its presence to at least 16 locations by June, the official said.
• In Saudi Arabia, SBI has already secured approval for setting up its first branch at Jeddah, which is likely to be operational by the fiscal-end.