6 March 2004

Rupee firm
Mumbai: The rupee closed marginally stronger at 46.2975 per dollar on Friday as against previous close of 46.32. Bonds - the 7.28 per cent 2015 fell to a low of Rs 117.15/16. The 7.55 percent 2010 fell to Rs 112.90.
Market Call Rates were at 4.10 per cent levels.

L&T Holdings' NCD programme upgraded
Mumbai: Fitch ratings India has upgraded the rating of the Rs 50 crore NCD programme of L&T Holdings Ltd to AAA+ from AA+. Based on the irrevocable and unconditional guarantee given by L&T the instrument has now been upgraded from its earlier status, according to a press release. The AAA rating denotes highest credit quality with the lowest expectation of risk and is unlikely to be adversely affected by foreseeable event.

FDI cap in private banks hiked to 74 pc
New Delhi: The foreign direct investment (FDI) cap in private banks has been raised to 74 per cent under the automatic route from the existing 49 per cent. The guidelines notified today by the Department of Industrial Policy and Promotion (DIPP) has, however, placed a cap of 49 per cent on foreign institutional investor (FII) holding within the overall FDI limit.

The notification said that the 74 per cent limit would include "aggregate foreign investment from all sources." The 10 per cent limit for the holding of an individual FII has been retained. Similarly, for NRIs, the individual limit has been set at 5 per cent, while the aggregate NRI holding has to be within 10 per cent. The cap can be raised to 24 per cent by a special resolution issued by the general body of the bank.

Tamilnad Mercantile Bank: High Court seeks status
Chennai: The Madras High Court has asked the board of directors of Tamilnad Mercantile Bank to go into the status of the recent agreement under which members of the Nadar community bought the bank's shares from Mr C. Sivasankaran of the Sterling group.

The board has been asked to look into whether the seven persons who had acquired 34 per cent of the shares constituted a group or were individual investors. Over 50 members of the Nadar community have expressed their intention to seek election to the board of directors.

Foreign banks may set up 100 per cent subsidiaries
New Delhi: The Government has stipulated that foreign banks can set up 100 per cent subsidiaries in India, by choosing one among three alternatives. They can have a branch network or a wholly-owned subsidiary or a private banking subsidiary with aggregate foreign holding of up to 74 per cent. Foreign banks that are regulated by a banking supervisory authority in their home country would be allowed to adopt the 100 per cent subsidiary route.

5 March 2004

Rupee extends loss
MUMBAI: The rupee closed weaker at 45.32 on Thursday against the dollar in the forex market.

Bonds - The 8.07 per cent 2017 opened at around Rs 122.48/50 and closed at Rs 122.35/37. Call rates remained at around 4.25 per cent levels in the inter-bank market.

SBBJ and ICICI Bank to share ATM network
Kolkata: State Bank of Bikaner & Jaipur (SBBJ) is planning to expand its ATM network by entering into shared network arrangement with ICICI Bank. Once the arrangement is finalised, an ATM card of SBBJ would enable access to as many as 6,000 ATMs all over the country. SBBJ has similar arrangements with SBI and its six associate banks and also UTI Bank and HDFC Bank.

IRDA issues new insurance brokerage norms
Hyderabad: The Insurance Regulatory Development Authority (IRDA) has issued fresh guidelines removing the 5 per cent special discount for companies with paid up capital up to Rs 3 crore. The system to be applicable from April 1 will be for a one-year period, except for the marine hull tariff business.

RBI: Banks have to accept coins of all denominations
Chennai: The Reserve Bank of India today directed banks to accept coins of all denominations from any member of the public. In a circular to banks the RBI has said that if banks find it difficult to count large number of coins, they should buy coin-counting machines or accept coins by weight.

The instruction follows complaints from traders that banks are not accepting coins when they are deposited into their (traders') accounts. The issue had been taken up with the banking ombudsman, by the Tamilnadu Chamber of Commerce and Industry, Madurai.

RBI to consider $ loans at special rates for Exporters
Kochi: According to L. Mansingh, the Director-General of Foreign Trade (DGFT), the RBI is working on a plan to come out with a lower interest rate, to raise dollar-denominated funds, for exporters with a good track record. The DGFT had taken up the issue of lack of sufficient foreign exchange for exporters, despite the country's large forex reserves, with the RBI. The DGFT is also considering laying down a green channel for exporters with a good track record, by doing away with the need to furnish bank guarantees

Bank of Maharashtra: Issue oversubscribed 3.5 times
Mumbai: The Rs 230-crore public issue of the Bank of Maharashtra is believed to have been oversubscribed nearly 3.5 times. The issue offering 10,00,00,000 shares at Rs 23 (face value Rs 10 plus premium Rs 13) had opened on February 25, 2004.

4 March 2004

Rupee down 5 paise; gilts rise marginally
Mumbai: The rupee lost over five paise to end on Wednesday at 45.2850/2900 in its value against the dollar.

G Secs
The 8.07 per cent 2017 paper opened at Rs 122.10 and closed at Rs 122.30. The 10-year benchmark, 7.37 per cent 2014 paper closed 10 paise higher at Rs 116.55, with a corresponding yield of 5.24 per cent.

LIC: To launch two unit-linked schemes
Mumbai: Life Insurance Corporation of India proposes to launch two new unit-linked products in the first quarter of the fiscal 2004-05. The two new products will be linked to endowment and pension plans respectively. Currently, LIC has only one unit-linked product in its portfolio, namely `Bima Plus'.

According to the company it is scouting the European and the US markets for joint venture business opportunities. It also proposes to set up an offshore company in Mauritius in the near future, which will cater to the needs of the African market. Around 3.5 per cent of LIC's annual premium income is constituted by its international operations. The insurer already has a presence in Sri Lanka, Nepal, Bahrain and Oman.

SBI to finance Siemens equipment
Mumbai: State Bank of India has entered into a Memorandum of Understanding (MoU) with Siemens Ltd, for financing purchase of medical equipments being sold by the company. Doctors with clinics, nursing homes, corporate and medium size hospitals can avail of loans from State Bank Of India under this arrangement, for amounts varying from Rs 20 lakh to Rs 5 crore. With its retail banking thrust, State Bank of India has already launched Doctor Plus Scheme, whereby medical equipments can be purchased on easier terms and conditions.

Centurion Bank studying rights issue
Mumbai: Centurion Bank has constituted a sub-committee to look into the procedural matters related to the slated rights issue of Rs 65 crore. The committee is authorised to inter-alia determine the final size of the rights issue and the ratio of rights of shareholders, subject to the minimum of Rs 65 crore as mentioned in the original scheme of restructuring.

The shares of the bank with a face value of Re 1 will be re-listed on Thursday, and trading will commence on the three exchanges of BSE, NSE and Mangalore Stock Exchange. The earlier shares with a face value of Rs 10, had been de-listed a month back and re-allotted to the shareholders with a lower face value as part of a restructuring plan.

3 March 2004

Fitch Ratings: Centurion Bank CoD is `fair'
Mumbai: Fitch Ratings India has placed the Certificate of Deposit programme of Centurion Bank on `F3(ind)' grade, indicating fair credit quality. `F3(ind)' ratings indicate that the capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade.

Fitch said in a press release, "This follows the approval of the restructuring and recapitalisation programme of Centurion Bank and successful completion of the first phase of equity infusion under the new management."

RBI: Urges vigilance against fake relief bonds
Mumbai: The Reserve Bank of India has asked urban co-operative banks (UCBs) to exercise caution while granting advances against the security of relief bonds as it has detected fake bonds in circulation. In a circular to UCBs, the apex bank said, a few instances of fake bonds and certificates have come to its notice. ``We have come across a case where a person, reporting himself to be an agent of the bondholder, had submitted a colour xerox copy of the bond for signature verification. Such practices, intentionally or unintentionally, may lead to frauds. There is an urgent need to introduce a control mechanism to ensure that sanction of loans from different banks against the same bond is prevented,' the circular said.

The RBI has said many banks have not got these bonds and certificates transferred in their own names before disbursal of loans. They refer the matter to the Public Debt Office of the Reserve Bank of India and specified branches of agency banks after a lapse of 2-3 years from the date of sanction of loan or after the bond has matured for repayment. Some banks have also reported that the bonds pledged with them, but not transferred in their name, have been lost.

2 March 2004

Public Financial Institutions: NDDB amongst five others
New Delhi: The National Dairy Development Board and five other institutions have been declared public financial institutions (PFIs). UTI-1, a specified undertaking of the Unit Trust of India, has been left out owing to uncertainty over whether it can be a PFI or not.

The other applicants, besides NDDB, are Pradeshiya Industrial and Investment Corporation of UP Ltd, Rajasthan State Industrial Development and Investment Corporation Ltd, State Industrial Development Corporation of Maharashtra Ltd, West Bengal Industrial Development Corporation Ltd, and Tamil Nadu Industrial Development Corporation Ltd.

Some of the advantages of being declared a PFI include the fact that borrowers need not deduct tax at source from the interest they pay, thereby saving financial institutions from maintaining records and reconciling their tax liabilities.

RBI defers revised norms for audit firms
Mumbai: Acceding to requests from the Institute of Chartered Accountants of India, New Delhi, the Reserve Bank of India has decided to defer the implementation of the revised empanelment and categorisation norms for audit firms to be considered as statutory central or branch auditors of 27 public sector banks, for a period of one year. The new norms will now come into force with effect from 2005-2006 instead of 2004-2005 as planned earlier.

Similarly, the decision to prepare a panel of statutory branch auditors for 27 public sector banks once in two years effective 2004-2005 has also been deferred for a period of one year. Accordingly, the statutory branch auditors' panel that would be prepared for 2004-2005 would remain in force for that year only and from 2005-2006 and onwards, such panel would be prepared once in two years.

Rupee range-bound
Mumbai:The rupee was marginally up against the dollar to close the Monday's trade at 45.2325/2375. G-Sec prices closed higher. The 8.07 per cent 2017 paper opened at Rs 122.05 and closed at Rs 122.17. The 7.49 per cent 2017 paper opened at Rs 116.40 and closed at Rs 116.54. The 10-year benchmark, the 7.37 per cent 2014 paper closed with a yield of 5.25 per cent.

1 March 2004

Forex Reserves: Up by $169 million
Mumbai: The country's foreign exchange reserves had added a further $169 million due to fresh inflows and revaluation of the US currency vis-à-vis other currencies for the week ended February 20. The foreign exchange reserves stood at $1,07,675 million, according to the Reserve Bank of India's weekly statistical bulletin.
The foreign currency assets also saw a similar increase of $169 million to touch $1,03,384 million. Gold reserves and special drawing rights during this period remained static at $4,289 million and $2 million respectively. India's Reserve Tranche Position (RTP), with the International Monetary Fund (IMF), declined by $12 million to $1,324 million, the central bank said adding, that the RTP may change from time to time due to India's transactions with the IMF as well as changes in SDR exchange rates vis-à-vis the rupee and the dollar.

RBI: Independent Panel for ECB applications
Mumbai: The Reserve Bank of India has formed a three-member committee to clear applications for external commercial borrowings (ECBs) of above $500 million. The three members on the committee are the former State Bank of India chairman, Dipankar Basu, Infrastructure Finance and Development Corporation's managing director Naseer Munjee and National Securities Depository Ltd's managing director CB Bhave.
This committee will vet forex loan proposals in excess of $500 million, and give its view to the central bank on the merits of the same. It has also been decided to put in public domain the details of all such applications, and the names of the borrowers involved.

Corporation Bank: 'Favoured bank' for tractors
Mangalore: The Corporation Bank has signed a memorandum of understanding with Tractors and Farm Equipment Ltd for financing tractors to farmers. This grants Corporation Bank the status of being the "favoured bank" of Tractors and Farm Equipment Ltd for the financing of their tractors.

HDFC: Raises Rs 1000 crore
Mumbai: Housing Development Finance Company (HDFC) has become the first private corporate to raise Rs 1,000 crore debt in a domestic issue for corporates in 2003-04. The financial institution has tapped the market for five years at a coupon of 5.85 per cent. Deutsche Bank is the lead manager to the issue with the ICICI and UTI Bank as the co-arrangers to the issue. With this the outstanding papers in the market for HDFC stand at Rs 4,000 crore.

ADB plans fresh $100m rupee bond float
Mumbai: The Asian Development Bank (ADB) may come out with another rupee bond issue of $100 million before the calendar year, contingent to approvals of projects for which funding is to be done. ADB raised Rs 500 crore from India through a 10-year bond at 17 basis point over the gilt yield of 7.37 per cent 2014.
ADB has identified three projects for onlending the money raised from the Indian debt market including healthcare, power transmission and housing finance. It has also entered into a interest rate swap with the HSBC under which the ADB will get fixed rate proceeds for ten years while HSBC will have floating interest rate pegged to the one year gilt. ADB has indicated that the swap route of bringing dollars from overseas and converting them into rupees will continue along with rupee resources for onlending in India.

ADB has indicated that they are on the lookout for more infrastructure projects and banks for equity participation.