3 April 2004

Rupee down 10 paise
Mumbai: The rupee closed weaker by almost 10 paise at 43.7350/7450 in its value against the dollar. The forex market remained closed on Thursday due to the yearly closure of accounts.
Forwards Market- The six-month premium closed at 0.70 per cent (0.85 per cent) while the one-year premium closed at 0.55 per cent (0.68 per cent).
G-Secs were up by 30-40 paise across maturities. The 7.46 per cent 2017 paper opened at Rs 119.56/57 and got dealt up to Rs 119.87. The 8.07 per cent 2017 opened at Rs 124.67 and got traded up to Rs 124.95. The 7.37 per cent 2014 opened at Rs 117.43/48 and got dealt up to Rs 117.55/60 at the rate of 5.11 per cent.
Call rates remained easy at the 4.25-per cent levels in the interbank market.

RBI: No ECBs for working capital
Mumbai: The Reserve Bank of India has clarified that external commercial borrowings (ECB) cannot be raised for working capital, general corporate purpose and repayment of existing rupee loan purposes.The central bank has also clarified that the maximum amount of ECBs that can be raised by an eligible borrower under the automatic route is $500 million or its equivalent during a financial year, up from the previous limit of $50 million.

The bank ahs also said that borrowers who had availed themselves of ECBs under the erstwhile $5-million scheme with specific approval of the Reserve Bank of India, may now approach the RBI for elongation of the repayment period.RBI has decided to delegate general permission to the designated bank to approve such elongation, provided there is a consent letter from the overseas lender for such re-schedulement without any additional cost.

RBI to auction 91-day T-bills on April 7
Mumbai: The Reserve Bank of India has announced a Rs 2,000 crore auction of 91-day Government of India treasury bills to be held on April 7, 2004. Of the total Rs 1,500 crore will be under the Market Stabilisation Scheme (MSS), while Rs 500 crore will be under the regular auction calendar, said a press release.

The auction will be conducted using "Multiple Price Auction" method. The allocation to non-competitive bidders will be outside the notified amount, at the discretion of the Bank, the release said.
Tenders should be submitted in the prescribed form on Wednesday, April 7, before 1230 hours. The results will be announced the same evening. Payment by successful bidders will be on Saturday, April 10, 2004.RBI has also announced a Rs 5,000 crore price based auction of the 6.18 per cent government stock 2005, on April 6, 2004. The sale (re-issue) of this security will be done using a multiple price method.

RBI: No forex accounts for residents in OBUs
Mumbai: The central bank, through a notification has said that "banks are advised to ensure that the OBUs do not accept/ solicit deposits or investments from residents or open their accounts."
The RBI has drawn the attention of all commercial banks to the scheme for setting up of OBUs which stated that the sources for raising foreign currency funds by an OBU would be only external and that funds can also be raised from those resident sources to the extent such residents are permitted under the existing exchange control regulations to invest/maintain foreign currency accounts abroad.Banks without overseas branches had plans to set up OBUs in order to offer foreign currency deposits through its OBU.

ICICI Bank issue oversubscribed
Mumbai: The public offer of Rs 3,050-crore, with a greenshoe option of Rs 450 crore, from the private sector ICICI Bank has been oversubscribed 109 per cent.According to the BSE, the issue, with a total size of over 11.96 crore shares, has received cumulative bids of over 13.10 crore shares, with the maximum number of bids coming at Rs 280. The public issue closes on April 7, 2004.

2 April 2004

Bonds gain
G-Secs - up by around 23 paise to 35 paise across maturities. The 7.46 per cent 2014 paper opened at Rs 119.35 and got dealt up to Rs 119.60. The 8.07 per cent 2017 opened at Rs 124.45 and got dealt to Rs 124.68.

Annual Policy Statement is the new name
Mumbai: The central bank has said that Dr Y.V. Reddy, Governor, Reserve Bank of India, would announce the Annual Policy Statement for the year 2004-05 on May 18. The credit policy itself will hereafter be known as 'RBI's annual policy statement' and not as the monetary and credit policy.
The RBI's rationale for renaming the policy is that measures announced over the past few years were related to credit and financial sector reforms per se, and accordingly appropriate changes have also been made to the nomenclature.

SIDBI reduces lending rate for SMEs
New Delhi: The Small Industries Development Bank of India (SIDBI) has sought the permission of the Reserve Bank of India (RBI) to offer working capital assistance to companies in the small-scale sector. SIDBI has decided to reduce the lending rate to the SME (small and medium enterprises) sector to 9.5 per cent, which was two percentage points lower than the bank's prime lending rate of 11.5 per cent.SIDBI was also waiting for clearance of the definition of medium scale industry from the Ministry of Small Scale Industries to provide finance to the sector.Currently, there is no definition of a medium scale sector industry. The SIDBI board has approved a proposal for terming an industry having an investment of up to Rs 10 crore in plant and machinery as being in the medium scale sector. The Ministry of Finance has cleared the proposal.

1 April 2004

Rupee breaks through the 44 mark
Mumbai: The domestic currency touched a near four-year high to end the day at 43.60/65 in its value against the dollar. The currency gained 46 paise or over 1 per cent from its previous close. Since the domestic markets were closed on Tuesday the bunched-up supplies of the dollar flooded the market today.
Forwards Market- The six months forward ended the day at 0.85 per cent and the one-year closed at 0.68 per cent.

G-Secs prices moved up by about 10-20 paise as `valuation deals' were struck to prop up prices. On March 31, players conduct a mark-to-market exercise through which they arrive at valuations of their government securities portfolio. The 8.07 per cent 2017 paper opened at Rs 124.29, and closed at Rs 124.37.

Vijaya Bank launches Infosys Finacle as a pilot project
Bangalore: Vijaya Bank announced the launch of a core banking solution for its consumers and corporate banking customers with the deployment of the Infosys' centralised banking solution Finacle. Wipro will be the prime integrator as well as the provider of tele-banking and anti-money laundering solutions to the bank.The bank said the Rs 90-crore initiative was on a pilot project now and would be extended across 350 branches in 18 months with the IT majors' services. Wipro and Infosys are co-implementing similar projects with the Union Bank of India and the Oriental Bank of Commerce.

Headstrong to take on 150 heads more
Bangalore: Global consultancy firm Headstrong plans to ramp up its Investment Banking Centre of Excellence in Bangalore by adding over 150 people in the current year.The company currently has about 90 financial services domain specialists at its Bangalore centre, which focuses exclusively on developing technology solutions for the securities industry.The financial services practice of Headstrong provides front-end and middle office applications for securities lending, private wealth management, order management and reference data.

Citigroup completes revolving securitisation
Mumbai: Citigroup has completed India's first revolving securitisation issuance for its small and medium enterprises working capital loans. The fixed rate issuance of Rs 50 crore comprised two series of pass through certificates with bullet maturity of two years.Citigroup said that this technology could be used to target other short-term asset classes.

Tata Power issue gets stable ratings
Mumbai: CRISIL has assigned `AA+' or stable ratings to Tata Power Company's Rs 500 crore non-convertible debenture issue, while reaffirming the same rating for two NCD programmes of Rs 500 crore each. It has reaffirmed a P1+ rating assigned to TPC's Rs 200 crore short-term debt programme.While the ratings factor the company's improving financial profile, long-term tenure of TPC's loans and strong financial flexibility, Crisil has said there is threat of potential loss of bulk consumers in Mumbai.

31 MArch 2004

Four new HDFC Bank branches in Kerala
Kochi: HDFC Bank has opened four new branches in Kerala. With the addition of branches at Changanassery and Manjeri and two new branches in Ernakulam and Aluva, the bank will now have a network of 15 branches across the State.In Kerala, the bank has also branches in Kozhikode, Kannur, Kollam, Kottayam, Palakkad, Thrissur, Thiruvalla and Thiruvananthapuram.

ECGC offers marine insurance as add on
Mumbai: The Export Credit Guarantee Corporation (ECGC) and National Insurance Company Ltd have decided to come together to provide marine insurance as an `add on' facility to exporters who opt for ECGC's specific shipment policies for comprehensive risks from the next fiscal.

The credit insurance, along with marine insurance, will be available without any additional cost. Initially while this will be offered only to specific shipment policies.The two companies signed a memorandum of understanding for promoting and expanding exports of small and medium size enterprises.

IDBI in Rs. 82 crore securitisation of home loans
Mumbai: IDBI Bank has completed a Rs 82-crore securitisation of its home loan portfolio. The mortgage-backed securitisation (MBS) is in 3 tranches, spread across seven investors. A significant feature of the securitisation is that it incorporates accentuated prepayment protected and prepayment prone tranches.

GAIL bonds subscribed for in minutes
Bangalore: A bond issue by GAIL for Rs 500 crore has been lapped up barely minutes after offer at a coupon of 5.85 per cent. The issue does not have any call or put options.Earlier issuers such as the Power Finance Corporation, Indian Railway Finance Corporation, PowerGrid Corporation, Konkan Railway Corporation Limited, Exim bank and Power Finance Corporation also found their respective issues oversubscribed barely 12 hours after inviting the offers.

All these issuers had priced their respective private placement at rates close to that of GAIL. The amounts raised varied from Rs 250 crore to Rs 500 crore. Most of these issues are now listed on the National Stock Exchange to conform to the new guidelines of the Securities Exchange Board of India and the RBI.

Rupee breaches 45 level
Mumbai: The Indian rupee breached the 45-level mark ending at 44.87, gaining 21 paise in its value against the dollar from the previous close. The rupee has risen by 37 paise in the last three trading days.
Forwards Market - The six months forward contract ended the day at 0.58 per cent (0.58 per cent) and the one-year closed at 0.60 per cent (0.63 per cent).
G - Secs - The 8.07 per cent 2017 paper opened at Rs.123.95 and closed at Rs.123.77. The 10-year benchmark, 7.37 per cent 2014 paper, opened at Rs.117.15 and closed lower at Rs.117.

Steelage: New bank automation products
Chennai: Steelage Industries Ltd plans to launch a safe vault that uses a robot to dispense cash to a bank official.
A member of the Swedish firm, Gunnnebo Security Group, Steelage Industries would also launch an ATM recycler, which would accept cash from customer, count it and provide a receipt. The machine would also recycle the cash and dispense it to a customer.Steelage Industries, provides physical security products and fire protection devices and systems.

Corporation Bank: Loans for jewellery
Mangalore: Corporation Bank, Tanishq and World Gold Council (WGC) have entered into a tie-up to offer finance scheme to their customers for the purchase of gold jewellery.The arrangement - Tanishq/WGC - Corp Mahila Gold - will be promoted at all Tanishq outlets.

BoI denies knowledge of BCCI frauds
Mumbai: Bank of India (BoI) has denied knowledge of frauds perpetrated by the Bank of Credit and Commerce International (BCCI), and maintains that they were normal inter-bank business transactions.BoI informed the Bombay Stock Exchange that it is appealing against the judgment passed by the London High Court for it to pay around $82 million (around Rs 370 crore) in compensation for fraudulent transactions with the collapsed BCCI.
Barring one transaction on December 18, 1984 of $50 million, the essence of the rest of the transactions was that BCCI placed deposits with Bank of India and the Bank of India lent the same amounts to a certain borrower, Maran Trading, which was nominated by BCCI at a higher margin.

The December 18 transaction was between BCCI and Bank of India at the same rate of interest. The credit transactions were also secured by an irrevocable guarantee of BCCI (Overseas) Ltd, BoI has said in a notice to the BSE.The liquidator has contended that the aforesaid transactions of BCCI with Bank of India had no commercial purpose but to enable BCCI to manipulate fraudulently the published results of BCCI Group.The London High Court judge, Justice Nicholas Patten, has ruled that the then chief executive of Bank of India and the bank did not take enough care to verify the commercial purpose of the transaction.

Govt issues special bonds to liquidate oil pool account
Mumbai: The Government has announced the issue of `5 per cent Oil Companies-Government of India Special Bonds, 2009' for liquidating the outstanding claims of oil companies aggregating Rs.348.63 crore against the Oil Pool Account.The special bonds were issued at par to Oil and Natural Gas Corporation for Rs 257.60 crore and Oil India Ltd for Rs.91.03 crore on Tuesday, said a press release.

The investment in the special bonds will not be reckoned as an eligible investment for the purpose of statutory liquidity ratio, the release said.The special bonds will be transferable and eligible for market ready forward transactions (repo). The bonds, however, will not be an eligible underlying security for ready forward transactions (repo or reverse repo) with the Reserve Bank of India, the release said.

30 MArch 2004

Rupee gains 40 paise
Mumbai: The rupee gained another 40-paise in its value over the dollar on Monday, closing at 44.06/07 per dollar.
G-Secs - The 10-year benchmark 7.37 per cent 2014 paper opened at Rs 117.12/15 and closed at Rs 117.19/21. The 8.07 per cent 2017 paper opened at Rs 124.20/22 and closed at Rs 124.30/33.
Call rates were at 4.25 per cent to 4.50 per cent levels in the inter-bank market.

RBI: Mumbai offices functional on April 1
Mumbai: All the offices of the Reserve Bank of India in Mumbai and Navi Mumbai will conduct normal business on Thursday (April 1), said a news release.

G-sec deals shift to DVP-III mode from April 2
Mumbai: The settlement mode of government securities transactions, now carried out through the Clearing Corporation of India, will be shifted to the Delivery Versus Payment-III (DVP-III) mode effective April 2.With this, each security will be deliverable or receivable on a net-basis for a particular settlement cycle against the current system of gross settlement of securities under the DVP-II mode, according to an RBI release. These measures are expected to improve the liquidity in Government securities market and also reduce the price risk of market participants, the release said.

RBI hikes WMA ceiling for states by 13.53 per cent
Mumbai: The Reserve Bank of India (RBI) has hiked its aggregate normal ways and means advances (WMA) of state governments by 13.53 per cent to Rs 8,140 crore effective from April 1, against the earlier limit of Rs 7,170 crore. The minimum normal WMA limit is Rs 50 crore for any State, said an RBI release.

PNB to clear cheques through NCRs ECPIX
New Delhi: Punjab National Bank (PNB) has signed an agreement with NCR Corporation India to enable clearance of inter-city cheques within 48 hours after the cheque is presented at select centres. This will be enabled through the image-based cheque clearing system.The facility of intra-bank inter-city cheque truncation project uses ECPIX (Electronic Cheque Presentment with Image Exchange) Technology.

Cheque truncation is a process in which instead of the cheque travelling physically within a bank or between different branches or between the banks and the clearing-house, the electronic record (image) of the cheque is used for further processing and transmission, thus eliminating delays arising out of paper-based processing and transportation of physical cheques.After successful pilot run, the system will be introduced by connecting MICR centres located at Lucknow, Nagpur, Jaipur, Kanpur, Ludhiana, Chandigarh, Jalandhar, Agra, Allahabad and Varanasi.

Andhra Bank to share ATMs with HDFC Bank
Hyderabad: ANDHRA Bank has entered into an alliance with HDFC Bank for sharing its network of automated teller machines (ATMs). With this, the release said, Andhra Bank has become the first public sector bank to ink ATM sharing agreement with all the four new generation private sector banks - IDBI Bank, UTI Bank, ICICI Bank and HDFC Bank.

29 MArch 2004

RBI direct tax receipts on March 30
Mumbai: RBI will receive direct tax payments in cash up to 2.30 p.m. and, by cheques and other instruments, up to 3.30 p.m., on March 30, 2004, according to a news release issued by the apex bank. It has also requested the bank branches authorised by the income-tax department to make the necessary arrangements to accept payment of income-tax dues in those States where March 30 has been declared a holiday.

RTGS to handle BSE and NSE settlements by July
Mumbai: THE RBI expects that 75-80 per cent of the entire cash transactions across the country, in terms of value, will be routed through the newly set up online fund clearing and settlement system, the RTGS.The Real Time Gross Settlement (RTGS) system has a capacity to handle up to one-lakh transactions per day. The new paper-less payment system puts the country on par with the best in the world. The RBI will charge a bank Rs 25 for every transaction they put through it.

In the first phase, four banks (State Bank of India, HDFC Bank, Standard Chartered Bank and Saraswat Bank) have joined RTGS last week, while 15-20 banks are expected to join by the second week of April. All prospective banks and bond houses are expected to join by June.The central bank hopes to put customer transactions through the new system by April, and by July, it expects to handle the net settlement of the BSE and NSE transactions. This will enable SEBI to introduce the T+1 settlement in the equity market.