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Venture funds: Final guidelines soon

Our Bureau

MUMBAI, June 23

THE Securities and Exchange Board of India (SEBI) Chairman, Mr. D.R. Mehta, said offshore venture funds were expected to invest around $1 billion in India once the investment norms were cleared.

Addressing a round-table on financial sector hosted jointly by IBM and Economist Intelligent Unit here, Mr. Mehta said final guidelines on venture funds would be announced shortly. The proposal is that offshore venture funds can invest in India after reg istering with SEBI.

Mr. Mehta said he had suggested that SEBI would be made the single regulatory authority for the venture capital funding on the lines of FIPB model.

Referring to the reforms in capital market, Mr. Mehta said the stock markets were safe and the recent measures taken by SEBI have ensured stability of the market. He said the transaction cost in the domestic market was the second lowest among all stock e xchanges in the world (the lowest being the US).

Mr. Mehta said SEBI and NCAER have undertaken a study on the household investment pattern in India which would be released by the Finance Minister shortly.

Mr. A.K. Purwar, Deputy Managing Director, State Bank of India, said the bank was setting up a subsidiary for the group's IT needs and was considering an alliance partner, in light of its successful partnership experience with GE Capital in the SBI cards venture.

The bank was initiating virtual banking shortly, which would mean interconnectivity of 400 ATMs, specialised branches, introduction of remote and home banking, smart cards, Internet banking, e-commerce and e-broking, he said. Centralised banking solution s were being explored for anywhere/anytime banking to enhance customer value, as well as improved risk management, he added.

Highlighting the trends in the domestic banking sector, Dr. A. Vasudevan, Executive Director, Reserve Bank of India, said that he considered human resource development and a well-tuned security policy to be the biggest challenge to this sector. The regul atory implications in the medium term for the banking industry, in his view, would be modernisation and technology upgradation, realtime gross settlements (RTGS) and corporate governance.