28 February 2004

Rupee higher - Bonds down
Mumbai: The rupee ended higher against the US currency on Friday. Closing at 45.2425/2475 per dollar. G-Secs- the 10-year bond yield ended higher at 5.27%, up from 5.26% at Thursday's close.

The overnight inter-bank call money rate ended slightly higher at 4.25%-4.4% compared with the previous close of 4.0%-4.25% due to higher demand.

BoB to reduce floating home loan rates
Mumbai: Effective March 1, Bank of Baroda (BoB) has decided to reduce the rate of interest on housing loans to individuals under the floating rate option. According to an official statement, the reduced rate structure, with monthly rests, for the floating rate loans would now be 7.5 per cent per annum for a five year tenor, eight per cent for a tenor above five years and up to 10 years and 8.25 per cent for a tenor above 10 years. The revised rate will also be applicable to the existing borrowers who have availed themselves of housing loans under the floating rate option.
BoB's existing housing loan customers will have the option to convert from the fixed rate option to the floating rate option subject to payment on outstanding balance, at the rate of 0.5 per cent for every year of residual period of loan, subject to a cap of two per cent of the amount outstanding.

ICICI Bank adds to its 2-wheeler portfolio
Mumbai: ICICI Bank has signed an in-principle agreement to purchase the entire Rs 350-crore, two-wheeler portfolio of Tata Finance Ltd. The ICICI Bank already has a two-wheeler asset book of Rs 1,000 crore, and this portfolio will grow to about Rs 1,300 crore through this acquisition. The bank originates loans of Rs.140-150 crore to finance about 5,000 vehicles every month.

Birla Sun Life: Capital hike of Rs 40 crore
Mumbai: BIRLA Sun Life Insurance has announced that it has augmented its paid-up capital by Rs 40 crore to Rs 290 crore. The additional amount of Rs 40 crore has been contributed by the joint venture partners, the Aditya Birla Group and Sun Life Financial Inc. This capital infusion will be used to fuel expansion of infrastructure and support the increase in business volumes.

United Western: Rs 55 crore raised through bonds
Mumbai: United Western Bank Ltd today said that it has successfully raised Rs 55 crore through a private placement issue of unsecured redeemable non-convertible subordinated bonds.
The issue size at Rs 55 crore was inclusive of a greenshoe option of Rs 20 crore, an official statement said. The bonds, rated `A-` by CARE, was a mix of two options, one with tenor of 75 months bearing coupon rate of 7.10 per cent and the other with tenor of 99 months with coupon of 7.25 per cent.

The private placement of the bonds was made to augment Tier 2 capital for improving the capital adequacy ratio and enhancing long-term resources, the statement said.

ADB: Bond proceeds for core sector projects
Mumbai: The Asian Development Bank will lend the proceeds of its debt issue in the Indian bond market to private sector infrastructure projects in India. The Rs 500 crore will be disbursed for three projects in the areas of power transmission, healthcare and housing finance. ADB plans to lend to Indian private companies at 2-3 per cent higher than the Government bond rate of commensurate maturity with tenors ranging from 8 to 15 years.

The recently raised funds which will take another 3-6 months to be disbursed will temporarily be deployed in the government securities markets in short-term instruments such as treasury bills and government bonds with less than one year residual maturity. ADB is open to more issuances in the domestic debt market.

27 February 2004

JD Power: Car finance getting in younger buyers
New Delhi: According to a study by JD Power, the percentage of car buyers below the age of 25 has gone up from 9 per cent in 1999 to 12 per cent in 2003. Further, the percentage of car buyers between the age group of 25 and 30 years has gone from 17 per cent to 28 per cent between 1999 and 2003. While, the percentage of car buyers between the age group of 31 and 40 has remained stable at 31 per cent, the percentage of car buyers above the age of 40 has declined. According to the study, for the age group of 41-50 years, the percentage of car buyers has gone down from 27 per cent to 18 per cent. The survey shows that while in 1999, about 63 per cent of the cars sold were financed, the figure stood at 82 per cent in 2003

IDBI ECB raises $300 million
Mumbai: Industrial Development Bank of India has raised $ 300 million of five-year US dollar-denominated bonds through the external commercial borrowings route. The bonds carry a coupon rate of 4.75 per cent and yield of 4.829 per cent with a spread of 1.85 per cent over five-year US treasury bills. The bonds are to be redeemed in March 2009.

RTGS launch likely by March-end
Mumbai: The Reserve Bank of India hopes to launch its Real Time Gross Settlement System, a technology platform for immediate clearing and settlement of funds before March-end. The earlier RBI timeline had specified standalone implementation of Real Time Gross Settlement (RTGS) by January 2004 and full implementation by June.

Rupee steady
The rupee on Thursday held steady at 45.25 levels. The rupee touched an intra-day high of 45.2350 and an intra-day low of 45.26 to end the day at 45.2500/2550. G-Secs: The 5.64 per cent 2019 paper came at a cut-off price of Rs 98.32 and a cut-off yield of 5.81 per cent. The central bank received bids worth over Rs 8,400 crore for the Rs 5,000-crore auction. The 10-year 7.37 per cent 2014 paper, opened at Rs 116.65 and closed at Rs 116.50 with a yield of 5.25 per cent and the 8.07 per cent 2017 paper opened at Rs 122.40 but closed lower at Rs 122.20 with a yield of 5.62 per cent.

BANCS to share 2000 ATMs
Mumbai: Twelve banks have come together to form an ATM sharing arrangement under the banner of BANCS. The new arrangement will share a network of 2,000 ATMs.
The banks in the group are Bank of Maharashtra, Bank of Bahrain & Kuwait, Greater Bombay Co-op Bank, Centurion Bank, Central Bank of India, UTI Bank, Punjab & Sind Bank, IDBI Bank, Ratnakar Bank, SBI Commercial & International Bank, Cosmos Bank, Air Corporation Employees Co-op Bank, and the Saraswat Co-op Bank. Another eight banks are expected to join the group subsequently.

ABN Amro: No penalties on prepayments
Bangalore: ABN Amro bank has decided to completely waive loan prepayment premiums. The bank said there will be no prepayment penalties for borrowers beyond five years. The bank would also permit prepayments of up to 25 per cent of the principal per year. The Bank is also offering a fixed rate loan, irrespective of the loan tenor or amount. ABN AMRO has also tied up with ICICI Lombard for providing insurance cover to borrowers, which would be in the nature of a credit risk cover package. The premiums for the insurance package would be loaded on to the equated monthly instalments payments of the borrowers.

SBI Life aiming for higher sales
Mumbai: SBI Life Insurance expects to touch a sales target of Rs 180 crore by the end of the current fiscal. SBI Life Insurance, a joint venture between State Bank of India and Cardiff SA of France, had recorded revenues of Rs 133 crore, until January 31, 2004. The company has also obtained approval from the regulator for two products - an annuity plan and a unit-linked scheme.

IFCI merger: Govt assurance to staff on salaries
New Delhi: IFCI employees have been assured by the Ministry of Finance, that their salaries would be protected after the merger of their parent institution with Punjab National Bank (PNB).
However, the IFCI staff who decide not to avail of the ongoing voluntary retirement scheme (VRS) and stick on to work for PNB might have to take a cut on existing perks and benefits available to them. The disparity in pay packages was one of the reasons citied by the IFCI employees while pressing for their demand for a merger with the other fellow institution, IDBI, instead of a public sector bank.

26 February 2004

Rupee moves up
Mumbai: The rupee appreciated by three paise on Wednesday to end the day at 45.24/25 against the dollar.

G-Secs: The 7.38 per cent 2015 paper; opened at Rs 116.85 and closed at Rs 117.15. The 10-year benchmark, the 7.37 per cent 2014 paper, closed at Rs 116.70 at a yield of 5.22 per cent.

Bank of India: First to outsource IT requirements
Mumbai: Bank of India (BoI) has announced that it has awarded Hewlett Packard India Pvt. Ltd a $150-million 10-year outsourcing contract to provide a full suite of core-banking solutions and related services to the bank. BoI is the first Indian bank to outsource its entire IT-related requirements. Initially, 750 branches, that cover about 80 per cent of the bank's business, out of its 2,400 branches will be connected.

ADB rupee issue oversubscribed
Mumbai: Asian Development Bank's debut rupee bond issue was oversubscribed twice. The Rs 500-crore ten-year issues were priced on a book-building basis at a coupon rate of 5.40 per cent.
The interest is payable semi-annually.

Banks asked to achieve Rozgar Yojana targets
Mumbai: Reserve Bank of India has urged banks to expedite the meeting of targets as stipulated in the Prime Minister's Rozgar Yojana . In a circular issued to the chiefs of all commercial bank's here on Wednesday, the Reserve Bank of India has said, "The latest data available indicates that the gap in terms of actual performance necessitates gearing up the banks to perform as per the stipulated targets.'

As per the stipulated guidelines for PMRY, 50 per cent applications of the year's target should have been sanctioned and 15 per cent of the target should have been disbursed till September 30, 2003. Banks have been asked to ensure timely achievements of targets under PMRY scheme for 2003-04.

Its e-banking for GAIL
New Delhi: GAIL (India) Ltd has switched over to an e-banking system installed by the State Bank of India for all its major payments. GAIL, which releases around Rs 5,000 crore annually to Oil and Natural Gas Corporation, will henceforth make these payments exclusively through the e-banking module installed in the PSU gas major's corporate office in Delhi. GAIL is putting in place a system through which payments to vendors and contractors too can be made through a similar route. The two organisations have worked jointly to customise the service for GAIL to cover all aspects of e-banking, including vendors' payments, employee payments and e-fund transfers.

25 February 2004

Rupee gains three paise
Mumbai: The rupee on tuesday appreciated three paise to close the day at 45.2725/2825 against the dollar. G-sec prices gained by 20-60 paise across maturities.

RBI mulling rationalisation of small savings schemes
Mumbai: The Reserve Bank of India's advisory committee on administered interest rates is considering the rationalisation of the number of small savings instruments offered by the Government and also the tax treatment on such schemes. According to a press release, in its first meeting held here on Monday under the chairmanship of Dr. Rakesh Mohan, Deputy Governor, RBI, the committee reviewed the progress of implementation of the recommendations of the earlier expert committee on administered interest rates.

As per the recommendations of the earlier committee, the entire proceeds of small savings are being transferred to the State governments. Interest rates on small savings have increasingly been aligned to market interest rates, the release said.
Other members of the committee who attended the meeting, were, Dr. Ashok Lahiri, Chief Economic Advisor, Ministry of Finance, Mr D. Swarup, Secretary (Expenditure and Budget) Ministry of Finance, Dr. Suman Bery, Director General, National Council for Applied Economic Research and Prof. Mihir Rakshit, Director, Monetary Research Project, Investment Information and Credit rating Agency of India.

RBI: Further easing of current a/c deals
Mumbai: The Reserve Bank of India has further liberalised certain current account transactions, by allowing authorised dealers some categories of remittances in terms of the Foreign Exchange Management Act 2000, without having to obtain prior permission. According to an RBI press release, the categories of remittances eligible under this liberalisation include, remittance by artistes, commission to agents abroad for the sale of residential plots for amounts up to $ 25,000 or 5 per cent of the inward remittance, whichever is higher, and short terms credit to overseas offices of Indian companies. The relaxation will also be applicable for remittance for ads on foreign television where export earnings are less than Rs 10 lakh.

SBI and Visa offer prepaid foreign travel card
Mumbai: SBI and Visa International have launched the `Vishwa Yatra Foreign Travel Card', which will provide customers global access to cash in the regional currency, at 850,000 Visa ATMs, worldwide. The card will be a US dollar-denominated prepaid travel card. The card is being marketed as a more convenient option for the customer, compared to carrying cash or traveller's cheques. The load on the card ranges from a minimum of $500 to a maximum of $10,000. Although the card is denominated in US dollars, cardholders can undertake transactions in any currency anywhere in the world, except India, Nepal and Bhutan. Cardholders can make free balance enquiries through SBI's ATMs.

Standard Chartered's new PF plan
Mumbai: Standard Chartered Mutual fund is launching a plan for provident funds, which will carry a feature called "Defined Maturity Date". This will allow PF fund managers to predefine a date for automatic redemption of their units and thus allow better planning of their cash flows. This plan is being launched under the Grindlays Government Securities Fund, and has been initiated to follow up on the recent amendment allowing provident funds to invest in government security funds. The initial public offer for the fund remains open from February 24 to March 17.

A Rs. 100 crore Turnaround Fund
Hyderabad: Mr. Ramesh Gelli, the former chief of Vysya Bank and the chief promoter of Global Trust Bank, along with associates are seeking to float an exclusive `Turnaround Fund' fund. The fund, planned as a combination of venture capital and term loan, will help genuine entrepreneurs revive projects that are under financial crisis. The fund is claimed to be the first of its kind. Mr.Gelli is of the opinion that the returns would definitely be more encouraging than long-term funding.

RBI clearing operations hit
Mumbai: As thirty-three banks out of the 113 members of RBI's clearing house refused to participate in clearing operations on Tuesday, the Reserve Bank of India's clearing operations stood disrupted owing to the nation-wide bank strike. With just 61 banks participating only 2,340 instruments were cleared. The issues that were taken up for the strike include the restoration of the "right to strike" to workers, early conclusion of wage revision, opposing the anti-labour policies of the Government, opposing its privatisation moves and demanding one more option for pension.

24 February 2004

Rupee down five paise
Mumbai: As the dollar gained strength in the global markets, the rupee fell against the greenback by about 5 paise to close on Monday at 45.30. The rupee on Monday opened at 45.28/29 with the intra-day high being 45.27.

SIB ties up for rupee drawing arrangements
Kochi: In a move that is expected to hasten clearance of demand drafts and remittances between the bank customers in Dubai and those in India, the Thrissur-based South Indian Bank has entered into a tie-up with Wall Street Exchange Centre, LLC, for the commencement of rupee drawing arrangements. Wall Street Exchange Centre, LLC, is an established exchange house in Dubai. The speedy remittances will cover all the networked branches and the beneficiaries' accounts will be credited within 24 hours of the remittance from abroad. The bank has thus far concluded remittance arrangements with 14 reputed exchange companies and three leading commercial banks in the Gulf countries.

United Bank ties up with Tata AIG
Mumbai: Under a tie-up, UBI will offer the entire range of life insurance products of Tata AIG to its customers through its branch network. The bank has a network of over 1,300 branches, of which over 600 are located in rural areas. The insurance products have been simplified for the rural masses.

GOI 2019 paper auction on Feb. 26
Mumbai: The Government of India has announced the price-based auction of a 5.64 per cent 2019 paper, totalling Rs 5,000-crore, on February 26. Up to five per cent of the notified amount of the sale of the stock will be allotted to eligible individuals and institutions as per the scheme for non-competitive bidding facility in the auction of the government securities, said a press release.

RBI proposes market stabilisation bonds
Mumbai: The RBI has proposed to the Government of India to authorise issuance of existing debt instruments such as treasury bills and dated securities under the Market Stabilization Scheme (MSS).

According to the RBI, the total outstanding obligations of the Government by way of bills and securities issued under the MSS, will not exceed Rs 60,000 crore, for the present. The bills and securities will be issued by way of auctions to be conducted by RBI. The central bank will decide and notify the amount, tenure and timing of issuance of such treasury bills and dated securities.

StanChart launches EMI credit card
Mumbai: The Standard Chartered Bank has introduced an EMI credit card which provides customers a `hassle-free' payment schedule by automatically converting all purchases into 24 equated monthly instalments (EMIs). Purchases and payments can be made by swiping the new EMI card and the amount would automatically get converted into 24 EMIs, thereby eliminating all the attendant trouble of phone calls, paperwork, down payment, post-dated cheques, etc. An interest rate of two per cent per month would be charged on the outstanding amount as against the 2.95 per cent charged on the regular credit card. Any transaction through this card above Rs 2,000 will automatically be converted into EMIs and behave like an unsecured personal loan.

23 February 2004

New incentive for LIC agents
Hyderabad: A new `Corporate Club' incentive launched by LIC will entail agents to get a car advance of up to Rs 10 lakh is in the offing.

The incentive would also carry an office allowance of up to Rs 50,000 and will come into force from the financial year 2004-05, according to Mr S.B. Mathur, Chairman of LIC.

Corporation Bank wins 'Best PSB' award
Mangalore: Corporation Bank has won the "Best Public Sector Bank" award from Outlook Money magazine, according to a bank release here.

The Chairman and Managing Director of the bank, Mr K. Cherian Varghese, and the Executive Director, Mr P.K. Gupta, received the award from the Finance Minister, Mr Jaswant Singh, in Mumbai , the release added.

LIC agents support right to strike call
Thiruvananthapuram: The LIC Agents Organisation of India has called upon the agent community to extend support and join the general strike on Tuesday, February 24.

The Central trade unions and federations of the State and Central Government employees have called for a one-day general strike on that day to assert their right to strike, which, according to the LIC Agents Organisation of India, was a basic democratic right.