20 March 2004

Rupee higher
The rupee ended sharply higher at 45.16/17 in its value against the dollar. This is better than the 43-month closing high of 45.2250/2300 on March 10.
G-Sec - The yields on the benchmark 10-year paper fell to 5.15% (5.17%) with the 7.37% 2014 ending 21 paise higher at Rs 117.25/30.

Inflation finally below 5 per cent
New Delhi: After 16 weeks of over 5.0 per cent, inflation fell to 4.91 per cent mark for the week ended March six due to sharp fall in prices of vegetables, wheat, fuel products and manufactured items including food products, restoring credibility to the governments oft repeated claims of bringing it down to this level.

RBI approval required for investment schemes abroad
Mumbai: All banks, Indian and foreign, including those not having an operational presence in India should henceforth seek approval from the Reserve Bank of India before marketing foreign currency deposit schemes, overseas mutual funds, or any other such foreign financial services to resident Indians.In a circular to all authorised dealers in foreign exchange, the apex bank has observed that, several advertisements by both foreign and Indian banks, soliciting foreign currency funds and deposits do not contain appropriate disclosures to guide potential depositors

TMB's elected directors to discharge their duties
Chennai: The Company Law Board (CLB) has directed that the 10 elected members of the Tamilnad Mercantile Bank can now discharge their duties.This follows the submission of a report to the CLB of the proceedings of the bank's annual general meetings for the seven-year period between 1997 and 2003 and the elections to the board conducted at Tuticorin on March 12. The Chairman of the meeting, S. Ramalingam, a retired judge of the High Court, submitted the report. The bank's board now consists of 14 members including two nominated by the Reserve Bank of India and two by the Central Government.

19 March 2004

Rupee stable
The rupee was steady, ending the days trade at 45.2425/2450 in its value against the dollar.

Forward Market - The six months forward closed at 0.44 per cent (0.39 per cent) and the one-year forward closed at 0.54 per cent (0.48 per cent).

G-Secs- The 8.07 per cent 2017 paper closed at Rs 123.67 with a yield of 5.48 per cent. The ten-year benchmark was at Rs 117.10 at a yield of 5.17 per cent ( Rs 116.80, 5.21 per cent).

Fitch rates L&T Holding's NCD programme as F1+(ind)
Mumbai: Fitch India has assigned F1+(ind) rating to the proposed Rs 75-crore short-term non-convertible debenture programme of L&T Holdings Ltd (LTHL). The rating is based on the `letter of comfort' provided by L&T Ltd. The F1+(ind) rating denotes `highest credit quality' and indicates the strongest capacity for timely payment of financial commitments, said the news release.

Exim Bank will extend $2.2-b credit to African nations
New Delhi: The Export and Import Bank of India (Exim Bank) would shortly be expediting the extension of line of credit to the tune of $2.2 billion (around Rs 9,948 crore) to Egypt, Mauritius, Uganda, Botswana, Tanzania, Senegal and Zambia. This extension of credit will be as part of India's commitment to promote and encourage trade with them. This was stated by E. Barwa, Joint Secretary, Ministry of External Affairs (MEA) at a seminar on `Africa-India Business Opportunities' organised by ASSOCHAM, in association with the Exim Bank.

According to Barwa, a large proportion of the proposed credit will go to those who seek to invest in sectors such as pharmaceuticals, development of agri and horticultural industries in the African region, besides infrastructure and energy. The Chairman and Managing Director of Exim Bank, T.C. Venkat Subramanian said that his bank would actively facilitate Indian investment in the African region in the form of joint ventures and wholly owned subsidiaries. Subramanian also said that the Exim Bank would be seeking partnership with institutions such as African Development Bank, World Bank, Afri-Exim Bank and the East African Development Bank so that the credit line extension is done effectively.

UTI Bank will achieve 30 per cent growth during fiscal
Hyderabad: The Chairman and Managing Director of UTI Bank, P.J. Nayak, has said that the bank would consider plans for inorganic growth only when it failed to achieve the sort of growth rates it has been achieving in the last couple of years. He said that the current business model of organic growth had helped the bank register growth in the range of around 50 per cent.

Expressing satisfaction over the existing capital adequacy ratio of 11.2 per cent, he said the bank would achieve at least 30 per cent growth during the next fiscal without the need for raising tier-I capital. On the issue of offering board positions to HSBC, Nayak said the bank had no objection but it had not yet received any request from HSBC for board positions. HSBC had recently acquired Commonwealth Development Corporation's (CDC) holding in the UTI Bank.

Bajaj Auto ties up with Andhra Bank for loans
Hyderabad: Under a scheme called `Bajaj Kisan Chakra' the two-wheeler major Bajaj Auto Ltd (BAL) has entered into an alliance with Andhra Bank for extending two-wheeler loans to the farming community across the country.According to the BAL regional sales manager, with the public sector banks such as Andhra Bank offering two-wheeler loans at interest rates of around 9.75 per cent, and with repayment schedules of around 60 months on a diminishing balance basis, the customers would stand to benefit by 30 to 40 per cent. Andhra Bank and BAL are aiming to generate a business of around Rs 100 crore for the next fiscal under the tie-up. The auto major itself expects to sell around 24,000 vehicles during next fiscal under the scheme.

Red herring prospectus for public issue filed - ICICI Bank clears exposure limit hurdle
Mumbai: The draft red herring prospectus of ICICI Bank has been filed for raising Rs 3,050 crore through a book-built issue with a green shoe option of Rs 450 crore. The date of the issue is yet to be finalised. As on December 31, 2003, the bank's gross NPA, including technical write-offs, were higher at Rs 8,802 crore compared with Rs 8,414 crore as on March 31, 2003. The ratio of net NPA to net customer assets decreased to 4.7 per cent on December 31, 2003 compared with 4.9 per cent on March 31, 2003. During the nine-month period ended December 2003, the Bank sold Rs 288 crore of its bad loans to Asset Reconstruction Company (India) Ltd.

Borrowing by a single corporate group accounts for over 57 per cent of ICICI Bank's capital funds (i.e. tier I plus tier II capital), according to the prospectus.This accounts for approximately 5.2 per cent of the bank's total exposure. These exposures violate RBI norms and therefore, the bank has obtained approvals from the central bank to exceed them. According to the prospectus, the single borrower limit was breached due to the amalgamation of ICICI with ICICI Bank. Out of the 14 subsidiaries of ICICI Bank, three were loss making for the nine-month period ended December 2003. They include ICICI Securities Holdings Inc, a US-based subsidiary of ICICI Securities with a net loss of Rs 60 lakh; ICICI Prudent Life Insurance, with a net loss of Rs 152.68 crore; and ICICI Bank UK Ltd, with a net loss of Rs 5.79 crore.

18 March 2004

Rupee range-bound
Mumbai: The rupee closed at 45.2350/2450 in its value against the dollar. It opened at 45.24550/2550 with the intra-day high being 45.23.

Forwards Market- The six months forward closed at 0.36 per cent (0.34 per cent) and the one-year forward closed at 0.46 per cent (0.44 per cent).

G-Secs- The 8.07 per cent 2017 paper closed at Rs 123.35. The 10-year benchmark closed at Rs 116.95 with a yield of 5.19 per cent.

RBI to educate banks about Basel-II
Mumbai: The RBI plans to hold a seminar on Basel II shortly, to give bankers a better understanding of the new accord. Officials of the bank have said that the central bank would look at a variety of approaches to implement the Basel-II framework in a manner suitable to banks in the Indian regulatory environment.

The Basel-II accord links capital with risk management and will exert pressure on banks and supervisors to provide supervisory data inputs wherever necessary, in order to ensure consistency in the output across the banks.

RBI approval for $473.21 m ECBs in February '04
Mumbai: The Reserve Bank of India has given approvals to 39 companies to raise external commercial borrowings worth $473.21 million in the month of February.

The apex bank released the latest information relating to the ECBs under both automatic and approval routes for February, with a view to facilitating greater transparency.

SBI ties up with HMT for tractor finance
Bangalore: According to a memorandum of understanding signed between HMT Ltd and the State Bank of India (SBI), the bank will be the preferred financier for purchase of HMT tractors.
Farmers utilising the finance scheme would be entitled to a reduction of Rs 4,000 on the MRP of tractor from the dealers. The scheme is applicable to HMT's entire range of tractors, said a company release. An individual farmer or farmers not exceeding three in number (as co-borrowers) owning minimum four acres of irrigated land will be eligible for the finance.

The interest rate under the scheme would be 9.75 per cent for a loan up to Rs 2 lakh and 10.25 per cent for loans from Rs 2-5 lakh.

17 March 2004

Rupee stable
The domestic currency closed at 45.2400/2450 in its value against the dollar.

Forward Markets - The six months forward closed at 0.39 per cent (0.36 per cent) and the one-year forward closed at 0.48 per cent (0.46 per cent).

G Secs - The 8.07 per cent 2017 paper, opened at Rs 123.30 to touch a low of Rs 123.25 and finally closed at Rs 123.38. The 10-year benchmark closed at Rs 116.87 with a corresponding yield of 5.19 per cent.

Dhanalakshmi Bank goes for technology upgradation
Hyderabad: The Thrissur-based Dhanalakshmi Bank Ltd. bank has earmarked Rs 40 crore for implementing technology plans that include core banking solutions in 60 select branches and setting up of at least 50 automated teller machines (ATMs).

The bank will also set up a data centre at the Technology Park at Bangalore for which it has already acquired space. The bank expects its tier-II bonds issue for Rs 45 crore, to enhance its capital adequacy ratio to over 13.5 per cent from the current level of 10.45 per cent.

ICICI PruLife hikes capital base
Mumbai: ICICI Prudential Life Insurance Company has hiked up its capital base by Rs 50 crore to Rs 675 crore. The authorised capital of the company now stands at Rs 1,200 crore.As on December 2003, the company has sold over 5,50,000 policies with a sum assured exceeding Rs 13,000 crore.

Birla Sun Life goes for E-mail alerts
Mumbai: Birla Sun Life Insurance (BSLI) has introduced `e-mail alerts' as an additional facility for its policyholders.

BSLI will be using the e-mail alerts to communicate birthday greetings to policy owners and advisors, premium payment due notice - 15 days in advance of the due date, premium overdue reminder - 7 days after due date, policy lapse alert - 7 days after lapse date and for license renewals to advisors.

ICRA rates Lupin A1 for its short-term debt programme
New Delhi: ICRA has assigned an `A1' rating to Lupin Ltd's Rs 40-crore short-term debt programme (including commercial paper). Indicating the highest safety in the short term, the rating takes into account Lupin's improved operating margin of 24 per cent, resulting in an overall cash accrual of Rs 141.1 crore for the first nine months. The company has also reduced its debt load through repayments of Rs 272.7 crore, including pre-payments of Rs 196 crore during the first nine months of the current fiscal.

15 March 2004

LIC Housing seizes properties for payment default
Bangalore: LIC Housing Finance Ltd has seized two properties in Bangalore under the Securitisation and Reconstruction of Financial Assets Enforcement Security Interest Act, 2002 for default of payment by the project builders.

The two builders, Varna Builders and Bawker Construction Company Ltd, had availed themselves of a project loan in 1993-94 and defaulted on repayments.

The is for the first time such a action has been initiated by the LIC. According to the LIC, while Varna Builders had an outstanding of Rs 3.5 crore, Bawker owed Rs 85 lakh.