03.11.2006

• Asset price bubble in real estate feared by RBI
• Loans for contructions of new hospitals, hotels, cold storage houses and multiplexes may be hard to come by with RBI classifying such advances as loans to ‘real estate’. For a bank, a real estate tag means assigning a higher risk weightage of 150%, as against 100% for infrastructure sector. What this means is that against a capital of Rs. 9 that has to be maintained for a loan of Rs. 100 to industry, banks have to maintain a networth of Rs. 13.5 for every Rs. 100 loan to a project of real estate.
• Real estate loans are actively discouraged by RBI which has asked banks to set aaside higher capital for such loan assets. This stems from RBI’s fears that big money flows into real estate market may result in asset price bubble.
• According to WHO (World Health Organization) India needs abouts 80,000 hospital beds each year for the next 5 years to meet the demands of the population.
• RIL’s KG basin gas usage
• Reliance Industries Limited plans to build a trunk pipeline from Kakinada to Bharuch to transport the natural gas that is expected to be tapped commercially from its KG basin finds from mid-2008.
• RIL also plans to utilize this gas for city gas distribution in Bangalore.
• It plans to pump in about $5.2 bn for hiking its gas production from the originally envisaged 40 mmscmd to 80 mmscmd.
• Budget hotel business
• There are around 1285 budget hotels in India in the approved sector with about 51,000 rooms.
• Out of a total of 92,486 rooms in 2005, around 53,000 belonged to the three to 5 star category.
• The employees to room ratio is around 0.7 in budget hotels as compared to 1.7 to 3.5 in the higher category of hotels.
• Online marriages (match making) in India
• The business is already a Rs. 100 cr market and is growing at about 100% a year.
• Commercial helicopters in India
• There are stated to be about 140 of them.
• 76 of them are from Bell helicopters.
• General insurance industry size
• General insurance industry is Rs. 20,000 cr and growing at 15%
• Health insurance accounts for 10-12% of it, sized at Rs. 1,800 to 2,000 cr.
• Bancon (the National Banking Conference) 2006 is being held at Hyderabad from 3^rd – 4^th of November. See details and connected issues here.
• Banking scenario – macro picture
• Capital adequacy ratio (CAR): A minimum stipulated CAR was introduced to strengthen the banks to absorb losses and the ratio has subsequently been raised from 8% to 9%.
• CIBIL: Credit Information Bureau (India) Ltd., -- is the institutional mechanism for sharing of information on borrowers / potential borrowers by banks and financial institutions.