29 May 2004

Rupee down 4 paise
Mumbai: The rupee closed at 45.47/49 per dollar on Friday, sliding down a further four paise over yesterday, losing a total of 15 paise over the week.

Forwards Market: The six-month forward closed at a steeper discount of - 0.55 per cent (- 0.46 per cent), and the one-year forward closed at - 0.15 per cent (- 0.10 per cent).

G-Secs: The benchmark 8.07 per cent 2017 paper closed at a higher yield of 5.60 per cent (5.54 per cent) and the 7.37 per cent 2014 paper closed at a higher yield of 5.25 per cent, up from 5.21 per cent.

Call Rates: Closed higher at 5.50-6 per cent.

Andhra Bank ATMs to shutdown for eight hours
Hyderabad: All the 272 automated teller machines (ATMs) of Andhra Bank spread across the country will not function for nearly eight hours beginning 11 p.m. on Saturday up to 7 a.m. on Sunday.

SBI to pay 110 per cent dividend
Kolkata: The board of directors of State Bank of India at a meeting here on Friday recommended 110 per cent dividend (Rs 11 per share) for the year, inclusive of 10 per cent special dividend for the SBI Group as a whole. SBI has reported 18.55 per cent growth in net profit at Rs 3,681 crore in 2003-04 (Rs 3,105 crore in 2002-03). The operating profit of the bank during the year under review amounted to Rs 9,553.46 crore (Rs 7,775.40 crore), recording a growth of 22.87 per cent.

SBI's gross NPA ratio dropped to 7.75 per cent (9.33 per cent) and net NPA ratio to 3.48 per cent (4.5 per cent) and the operating expenses to total net income ratio to 49.18 per cent (50.53 per cent). Capital adequacy is at 13.53 per cent (13.50 per cent). The earning per share is Rs 69.94 (Rs 59). The State Bank Group has at present over 3,900 networked ATMs comprising over 2,800 of SBI and 1,100 of the associate banks covering 1,296 centres. The bank has an ATM card base of more than five million. In credit card business, the SBI card has a market share of 17 per cent.

IDBI to reduce interest rates
Kolkata: Industrial Development Bank of India (IDBI) board has agreed to a "graded reduction in interest rates" on high-cost rupee loans for all existing well-performing companies with the aim of bringing them roughly in line with the present lower interest rate regime.

Such graded reduction will be typically based on the credit rating assigned to individual corporates, M. Damodaran, Chairman of IDBI, stated here today. The rate for a rupee loan to an existing client, rated between AA+ and AAA, will now be reduced to a floor rate of 8.5 per cent. The other rates are: 9.5 per cent for AA to AA-; 10.25 per cent for A, A+ and A-; and 11 per cent for BBB and lower.

28 May 2004

Rupee down another three
Mumbai: The rupee closed at 45.43 in its value against the dollar on Thursday, weaker by about three paise, as compared with Wednesday's close of 45.40/41.

Forwards Market: The six-month forward closed at - 0.46 per cent ( - 0.58 per cent), and the one-year forward closed at - 0.10 per cent ( - 0.12 per cent).

G-Secs: The benchmark 8.07 per cent 2017 paper closed at Rs 122.82/85. The 7.37 per cent 2014 paper fell 20 paise to Rs 116.50. The 7.46 per cent 2017 paper closed at Rs 117.75.

Call Rates: Steady at 4-4.25 per cent.

SBI raises $250 m
Mumbai: State Bank of India has raised a $250 million foreign currency syndicated loan. Citigroup, BNP Paribas and Calyon were the mandated lead arrangers. A total of 12 banks from 8 countries form the syndicate of lenders, said a press release from Citigroup.

According to a Citigroup press release, this is the largest borrowing by any bank in the recent past and has been priced very finely to set a new benchmark for State Bank of India. It said further that the transaction is reflective of SBI's pre-eminent position, strong financials, and growth prospects.

RBI launches Gold card for exporters
Mumbai: The Reserve Bank of India in consultation with banks and exporters has announced the gold card scheme for exporters to get cheaper and faster credit. As per the scheme all credit worthy exporters, including those in small and medium sectors, with good track record will be eligible for a gold card. Individual banks are to lay down the eligibility criteria for issue of the card, said a press release from the apex bank.

The RBI has asked banks to clearly specify the benefits they would be offering to the gold cardholders. Some of the stated objectives include, better terms of credit including rates of interest than those extended to other exporters by the banks, faster and simpler processing of applications for credit, sanction of `in principle' limits for a period of three years with a provision of timely renewal, preference for grant of packing credit in foreign currency. The gold cardholders, on the basis of their track record of timely realisation of export bills, will also be considered for issuance of foreign currency credit cards for meeting urgent payment obligations, said the release.

ABN-Amro launches RTGS facility
Mumbai: ABN-Amro Bank has announced that it has seamlessly connected and transacted over the RBI's Real Time Gross Settlement (RTGS) network for both inter-bank and customer payments. This enables ABN-Amro's customers to obtain significant benefits for their working capital flows through RTGS transactions, said a press release from the bank.

HSBC gets RBI nod for UTI Bank stake
Mumbai: HSBC has said that it has received RBI's permission to buy 14.7 per cent stake in UTI Bank. HSBC has received RBI permission to carry out only the first tranche of the Rs 418-crore deal although it had applied for permission to purchase the entire 20.08 per cent involving two tranches. HSBC had earlier received the FIPB and SEBI nod for the same earlier. In December 2003, HSBC had announced the Rs 418-crore deal to purchase 20.08 per cent stake in UTI Bank from CDC Capital partners (now Actis) at around Rs 90 per share.

27 May 2004

Rupee weakens
Mumbai: The rupee closed at 45.40/41 per dollar on Wednesday, weaker by about four paise as compared with Tuesday's close of 45.36/3650.

Forwards Market: The six-month forward closed at -0.58 per cent (-0.62 per cent), and the one year forward closed at - 0.12 per cent (-0.24 per cent).

G-Secs: The 8.07 per cent 2017 paper was dealt up to 123.05. The 7.37 per cent 2014 paper closed at Rs 116.66/67. The 7.46 per cent 2017 paper closed at Rs 117.93/95.

Call Rates moved in a range of 4.10-4.50 per cent.

RBI panel asks bankers to change mindset
Mumbai: The RBI appointed advisory committee on flow of credit to agriculture has noted the difficulties faced by banks in achieving the target of 18 per cent. According to the Committee, all public sector and private sector banks should increase their direct lending to agriculture to a level of 12 per cent of net bank credit within two years and to the level of 13.5 per cent within the next two years thereafter. Banks, which have already reached this level, may maintain or improve their position.

The most important task, the Committee feels is to change the mindset of bankers. It needs to be emphasised that all over the world, retail banking is emerging as more profitable and less risky proposition. In the Indian context, there is hardly any better avenue for retail lending than agriculture, said the report. The Committee has also recommended the setting up of an "Agri-Risk Fund" with equal contribution from the Central and State Governments and the participating banks. Such a fund, the Committee feels, would mitigate risk of the lending banks.

Central Bank and New India tie up
Mumbai: The New India Assurance Co Ltd and Central Bank of India have entered into a bancassurance tie-up whereby the latter will distribute the insurer's non-life products through its extensive branch network. As per a Memorandum of Understanding signed here today, Central Bank of India will become the corporate agent of NIA and will distribute its non-life products through its 3,130 branches.

Allahabad Bank to pay 20 per cent
Kolkata: Allahabad Bank has declared a dividend of 20 per cent (Rs 2 per share) for the year 2003-04. According to an official release by the bank, necessary approval for this has been obtained from the RBI. During 2002-03, the bank had declared a dividend of 10 per cent. According to the release, the EPS of the bank has jumped to Rs 13.37. Similarly, the book value per share has increased to Rs 44.76 during 2003-04, up from the Rs 33.76 per share in the previous financial year.

26 May 2004

Rupee drifts down
Mumbai: The rupee closed at 45.36/3650 per dollar on Tuesday, weaker by about 4 paise as compared with Monday's close of 45.32/33.

Forward Market: The six-month forward closed at - 0.62 per cent (- 0.70 per cent), and the one-year forward closed at - 0.24 per cent (-0.35 per cent).

G-Secs: The 8.07 per cent 2017 paper closed at Rs 123.14. The 7.46 per cent 2017 paper ended 18 paise lower. The 7.37 per cent 2014 paper fell to Rs 116.72.

Call rates: closed at 4.20 per cent.

Bank of Maharashtra to pay 16 per cent
Mumbai: Bank of Maharashtra's (BoM) net profit for 2003-04 surged by 37 per cent at Rs 304.55 crore, up from Rs 222.02 crore posted in previous fiscal. The board has also recommended a dividend of 16 percent for the fiscal 2003-04. The capital adequacy ratio was pegged at 11.88 per cent and the investment fluctuation reserve stood at 3.35 per cent. The bank has also applied for opening representative offices in London, Singapore, New York and Dubai.

Kotak Mahindra Bank proposes 1:1 bonus
Mumbai: Kotak Mahindra Bank has completed its first full year as a banking entity with a net profit of Rs 78.72 crore, up 52 per cent from Rs 44.96 crore in the previous year and has proposed a 1:1 bonus and a 24 per cent dividend. On a consolidated basis, the Kotak Mahindra group (inclusive of the banking, investment banking, stock brokerage, life insurance, mutual fund and car finance businesses) posted a 138 per cent rise in net profit for FY04 at Rs 174.44 crore (Rs 73.32 crore). The bank has a robust capital adequacy ratio of 15.25 per cent. The net NPAs of the group is as low as 0.14 per cent. The bank plans to expand its branch network to 40 by FY05, up from 17 at present.

25 May 2004

Rupee loses 5 paise
Mumbai: The rupee closed at 45.32/33 in its value against the dollar on Monday, weaker by about 5 paise as compared with Friday's close of 45.28.

Forwards Market: The six-month forward closed at - 0.70 per cent (-0.70 per cent), and the one-year forward closed at - 0.35 per cent (- 0.33 per cent).

G-Secs: The 8.07 per cent 2017 traded at about Rs 123.27/31. The 7.46 per cent 2017 paper closed at Rs.118.19/23. The 7.37 per cent 2014 paper traded lower at 116.80/83.

Call Rates: Steady at 4.25-4.50 per cent levels.

Capital-indexed bonds may reappear
Mumbai: The Reserve Bank of India has proposed reintroducing capital-indexed bonds (CIB) with inflation-linked returns to deepen the government securities market. According to a press release, the RBI released a discussion paper on the structure of this instrument on Monday. The instrument was first introduced in December 1997. The proposed CIB would offer inflation-linked returns on both the coupons and principal repayments at maturity.

According to the discussion paper, the Wholesale Price Index for all commodities released by the office of the Economic Advisor, Ministry of Commerce and Industries, Government of India, would be taken as the index for measuring the inflation rate for the proposed bonds. However, for the purpose of inflation protection, it would be the monthly average of WPI (average of weeks) and not the weekly one. Referring to the coupon, the RBI said interest on CIB would be payable on a semi-annual basis at a fixed real rate of interest throughout the tenure of the bonds. The fixed real rate of interest would be applied not to the par amount of the security but to the inflation-adjusted principal.

RBI puts UCBs on notice regarding valuations
Mumbai: In a circular addressed to the chief executives of all primary (urban) co-operative banks, the Reserve Bank of India has cautioned them on unrealistically high valuations of property while granting mortgage loans. In a release the central bank has said that certain instances of housing loans granted against mortgage of house property, the value of which has been shown to be unrealistically high, has come to their notice. It has pointed out that the possibility of banks incurring a loss in the event of a need arising to recover the loan through disposal of the security was very high.

Warburg Pincus to pick up stake in Max India
New Delhi: Private equity fund Warburg Pincus has decided to pick up 29 per cent stake in Max India Ltd by investing Rs 200 crore in the company. It will pick up 10 million equity shares of Rs 10 per share at an issue price of Rs 200 per share through the preferential route. This will take the total investment of Warburg Pincus in India to over $850 million, which includes investments in companies such as Bharti Tele-Ventures, Gujarat Ambuja, Moser Baer, Nicholas Piramal, Rediff and WNS Global Services.

Max has a presence in the life insurance business through its joint venture with New York Life - Max New York Life Insurance and healthcare business. As part of the restructuring Max India has exited its pharmaceuticals and medical transcription businesses focusing on its core businesses of life insurance and healthcare. However, the company continues to hold a 10 per cent stake in Hutchison Max Telecom, operating cellular telephony services in the Mumbai circle.

Oriental Bank to pay 50 per cent dividend
New Delhi: Oriental Bank of Commerce (OBC) has recorded a net profit of Rs 686 crore in 2003-04, a 50 per cent growth against Rs 457 crore in 2002-03. The bank has announced a total dividend of 50 per cent for the year including the 20 per cent interim dividend it had paid earlier. The bank daid that it managed to increase its profit from Rs 457 crore in 2002-03 to Rs 686 crore in 2003-04 through high recovery of NPAs and reducing the cost of deposits.

The bank, which had brought down its net non-performing assets (NPA) to nil in fiscal 2002-03, has pruned its gross NPAs down from 6.9 per cent to 5.9 per cent in 2003-04. The bank has recovered Rs 557.58 crore worth of NPAs during fiscal 2003-04.
OBC's capital adequacy stands at 14.47 per cent as against 14.04 per cent last year. The bank's net worth has increased to Rs 2,676.79 crore from Rs 2,109.33 crore in the previous fiscal.
The earnings per share have gone up to Rs 35.63 from Rs 23.73 during 2002-03.

United Western to pay 15 per cent
Pune: The United Western Bank has registered a net profit of Rs 30.96 crore for the year-ended March 2004, an increase of 12.58 per cent against Rs 27.50 crore registered in the same period last year. The board of directors have recommended a dividend of 15 per cent subject to the approval by Reserve Bank of India.
The capital adequacy ratio stood at 10.13 per cent.

City Union Bank to pay 50 per cent and a 'special'
Coimbatore: The Kumbakonam-based City Union Bank Ltd (CUB) has posted a net profit of Rs 57.04 crore for the fiscal 2003-04, registering a 71 per cent growth over the previous year's Rs 33.37 crore. The board has recommended a dividend of 50 per cent and a special "centenary year" dividend of 20 per cent. This recommendation, however, is subject to the approval of the Reserve Bank of India. The bank managed to bring the net NPA to 6.37 per cent from a high of 8.21 per cent.

Centurion Bank to offer RTGS facility
Mumbai: Centurion Bank will soon offer online clearing and settlement system, Real Time Gross Settlement (RTGS) services.
It has received the RTGS compliant certification and approval from the RBI to offer this service, said the bank in a release.

24 May 2004

SBT opens cross-selling department
Kochi: The State Bank of Travancore has opened its cross-selling department at SBT Bhavan in Kochi. The bank opened this new facility exclusively for marketing life and non-life insurance products as also SBI Mutual Fund products through all its branches. The bank has entered into corporate agency tie-ups with SBI Life and United India Insurance Company for marketing life and non-life products.