CHENNAI, May 7: The Shriram group has become the first to take off from the blocks after the Reserve Bank of India (RBI) announced its new set of guidelines concerning overseas investment in non banking financial companies (NBFCs).

"We will be entering into a 50:50 joint venture with a Singapore-based company," the Shriram group chairman R Thyagarajan told The Financial Express.

The joint venture will be termed Shriram General Finance Ltd and both partners will be initially bringing in Rs five crore each," he said.

"The only factor that is stopping us from revealing the name of the joint venture partner is the fact that the Singapore company is a listed company and the rules and regulations governing corporate disclosures in that country are quite stringent," he said.

The new entity will be initially held closely, at least for the first couple of years, he added.

After this period the company may offer part of the equity to the public or go for an expansion of equity through an initial public offering. "We have not yet decided on that phase as of now," said Thyagarajan.

The joint venture will also concentrate on truck financing, an area where the Shriram group has a significant presence.

"While we are already operating in the northern parts of the Indian market, Shriram General Finance Ltd will be mainly extend our business in this segment," the group chairman said.

The group has also decided to revise its interest rates offered on its fixed deposit (FD) programme. "We will be bringing down our interest rates by one per cent," said Thyagarajan.

Investors should probably end up with returns of 15 per cent per annum on FDs upto one year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.