News Roundup: BofA Plans to Cut 35,000 Jobs; RBI Refinances Exim Bank


  • 12 Dec 2008

RBI Refinances Exim Bank -  RBI has decided to provide refinance of Rs.5000 crore to the Export Import bank of India at a repo rate of 6.5% for a period of up to 90 days up to march 2010. Exporters in problem will now be able to avail offline sod credit from the bank. The crunch in the credit market had made it tough for the Exim bank to raise foreign currency funds to support exporters but now with RBI's refinancing, the bank will be able to disburse foreign currency lines of credit to exporters.

Tata Sons May Not Convert Power Warrants - Tata Sons' stock is trading 46% lower than the conversion rate  and hence may not convert over 10 million preferential warrants issued by Tata power 18 months ago. According to market sources the conversion is due on December, 17th. It is uncertain that Tata power will be able to raise the Rs 1,400 crore, which it would have got at a cheaper rate from the conversion.

BofA Plans to Cut 35,000 Jobs -  Bank of America Corp., is expected to lay off 35,000 employees over the next three years as it has absorbed the New York securities from Merrill Lynch & Co. The reduction that represents 10%-11% of the two companies workforce put together will be done in all the levels and staff units and it reflects the redundancies created by both, Merrill lynch acquisition as well as the current economic slowdown.


Govt. Withdraws From Ambani Brothers Case Over K-G Basin Gas Price-The affidavit that had made the govt. a party to a natural gas sale dispute being fought by the Ambani brothers has been withdrawn by the govt. in the Bombay High Court, saying it would expedite the two-year old case. The case was being fought over the issue of pricing of gas from the Krishna-Godavari (K-G) basin, off India’s eastern coast, at a price ($ 2.34 a unit) lower than that approved by the government ($4.2 a unit), between Mukesh Ambani-promoted Reliance Industries Ltd (RIL) and Anil Ambani group company Reliance Natural Resources Ltd (RNRL).

Half of Jet Airways Employees Decline Wage Cut Offer - Nearly half of jet airway’s 13000 employees have accepted the management’s November offer for a voluntary, graded salary cut. However, among the half of the employees who have declined the offer are 750 odd pilots of the airline. The deadline for the offer was December 10. Jet airlines was looking at a monthly saving of 5 crore if all the employees had accepted the wage cut. Jet’s annual wage bill is Rs 2,000 crore, 25 per cent of the operating costs. The graded salary cut that the airline proposed was for 5, 10 and 25 per cent cuts respectively for employees earning between Rs 75,000 and Rs 2,00,000 a month, Rs 2,00,000 and 5,00,000, and above Rs 5,00,000.

Kingfisher to Pay Pilots on Hourly Basis Besides Basic Salary - Kingfisher Airlines has decided to change its pilots’ pay structure and rather pay them in a two-part pay structure based on the number of hours they fly. This move could lower pilot salaries considerably. Currently, the airline has 480 pilots, out of which 40 are expatriates under contract and hence are outside the purview of the new policy. The new salary structure will have a basic salary and an additional flying allowance which ranges from Rs 600 to Rs 1,300 per flying hour, depending on the pilot’s seniority. The new structure will come into effect from January 1, 2009.


Airlines Agree to Pay 3% Commission to Agents - Kingfisher and Jet Airlines have announced that they will pay a 3% commission to the travel agents. Kingfisher will also pay a 3% commission on the total fare which includes the basic fare and the fuel surcharge. This will make the amount paid as commission 30%-40% higher that what was paid earlier as the fuel surcharge constitutes up to 70 per cent of the total fare.

AT&T engages services of JPMorgan Mumbai Unit - AT&T Inc., the telecom firm has engaged the services of a Mumbai unit of JPMorgan Chase Bank NA as investment counsel to explore the Indian market for telecom assets. AT&T has a license to operate national and international long distance calls in India and it has also applied for mobile phone service. Reports also suggest that foreign telecom companies have approached Reliance Communications to acquire between 20% to 26% stake.

HSBC Cuts 193 jobs in India - HSBC’s Indian arm announced on Thursday that it has cut 193 jobs in India in its consumer asset business- credit cards and personal loans division. The bank has also repositioned 620 employees to other divisions including training, marketing and also group entities in the country.


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