10 July 2004

Rupee firms up
Mumbai: The domestic currency closed almost 20 paise up on Friday, ending at 45.66/67 against the dollar.

Forwards Market: The six-month forward closed at 1.28 per cent (1.16 per cent) while the twelve-month forward closed at (1.23 per cent) 1.14 per cent.

G-Secs: Market saw trades of about Rs 500-600 crore by way of an undeclared protest following the announcement in the Union Budget regarding the 0.15 per cent transaction tax to be levied on exchange traded transactions. The normal trade sees volumes of Rs 3,000-4,000 crore. The 7.38 per cent 2015 paper, 7.37 per cent 2014 paper and a few short-end papers along with a few floating rate bonds were traded.

Call Rates: In the range of 4.25-4.50 per cent.

Government withdraws three savings bond schemes
Mumbai: The Government has decided to withdraw the 6.5 per cent Savings (Non-taxable) Bonds Scheme and the two Deposit Schemes for Retiring Employees. Accordingly, the issue of 6.5 per cent Savings (Non-taxable) Bonds, 2003 and acceptance of fresh deposits under the Deposit Scheme for Retiring Government Employees, 1989 and Deposit Scheme for Retiring Employees of Public Sector Companies, 1991 shall cease with effect from the close of business on July 9.

9 July 2004

Bond prices crash
Mumbai: The rupee closed at 45.84/86 against the dollar on Budget day - unchanged from the previous levels of 45.8450/8600.

Forwards Market: The six-month forward closed at 1.16 per cent (0.96 per cent) while the twelve-month forward closed at 1.14 per cent (0.91 per cent).

G-Secs: The yield on the ten-year benchmark 7.37 per cent 2014 paper moved up to 5.80 per cent . The 7.38 per cent 2015 paper crashed to close at Rs 111.20. The 8.07 per cent 2017 paper dipped over a rupee ending at Rs 117.20.

Call Rates: Easy at 4.25 - 4.50 per cent.

With Rs 9,000 crore IDBI to have zero NPA
Mumbai: The Finance Minister in his Budget has set aside Rs 9,000 crore in to enable IDBI to clean up its balance sheet.
The Rs 9,000-crore will be called a stressed asset stabilisation fund and will be off the balance sheet of IDBI. IDBI had net NPAs as high as 14 per cent as on March 2003. IDBI is set to start functioning as a commercial bank with a focus on development finance.

8 July 2004

Rupee recovers 20 paise
Mumbai: The domestic currency closed around 20 paise stronger at Rs 45.8450/8600 on Wednesday as against its previous close of Rs 46.0450/0550.

Forwards Market: The six-month forward closed at 0.96 per cent (1.16 per cent) and the 12-month forward closed at 0.91 per cent (1.06 per cent).

G-Secs: The 7.38 per cent 2015 paper closed at Rs 112.00. The 8.07 per cent 2017 paper closed at Rs 117.90/95.

Call Rates: In the range of 4.10 to 4.25 per cent.

Economic Survey: Cut in lending rates to aid industrial revival
New Delhi: The Economic Survey has pointed out that the pace of reduction in lending rates has not matched the decline in the deposit rates. It has said that cuts in lending rates would strengthen and sustain the current revival in the industrial sector. "A major concern with regard to interest rates is the downward rigidity observed in lending rates. Lending rates have remained sticky and have not fallen as much as the deposit rates," the survey has said. This has resulted in the widening of interest spreads.

Providing a trend on the interest rate movement, the survey has pointed out that while deposit rates of major banks for term deposits of more than one year maturity has declined from 7.5-8.5 per cent on March 29, 2002 to 5-5.5 per cent on March 26, 2004, the Prime Lending Rate (PLR) of five major (unnamed) banks have moved from 11-12 per cent to 10.25-12 per cent during the period. However, it has said that lending rates have "declined markedly" for large top-rated corporates who are often provided credit at sub-PLR rates though lending rates have not declined commensurately for other borrowers. The survey feels that measures already taken by the Reserve Bank of India and those that are in the pipeline for improving credit delivery mechanism "are expected to further ease the rigidities in lending rates."

Wage talks: IBA and Unions stuck with respective positions
Combatore: The talks between the IBA and the representatives of the officers' organisations have not made much headway and according to reports, the officers' organisations are contemplating to resort to direct action. The United Forum of Bank Unions has called for a meeting on July 13 to chalk out the future course of action, including strike, to force the issue of overdue salary revision.

State Bank of Hyderabad launches pension scheme for Kisans
Hyderabad: The State Bank of Hyderabad (SBH) has launched "SBI Group-lifelong pension cum-life insurance cover to kisan credit card holders." The minimum yearly contribution is Rs 2000 and the scheme for the aged offers pension facility on a life-long basis.

7 July 2004

Rupee sheds 22 paise
Mumbai: The rupee closed weaker by 22 paise on Tuesday to end at 46.0450/0550 against the dollar. It had closed at 45.82/84 on Monday.

Forwards Market: The six-month forward closed at 1.16 per cent (1.33 per cent), while the twelve-month forward closed at 1.06 per cent (1.53 per cent).

G-Secs: The ten-year benchmark 7.37 per cent 2014 paper yielded 5.70 per cent at the end with a closing price of Rs 112.45. The 8.07 per cent 2017 paper closed at Rs 118.26/27.

Call Rates: Stable at 4.25-4.50 per cent.

RBI tightens investment norms for Banks and FIs
Mumbai: According to the RBI, investments of banks and financial institutions (FIs) in various instruments such as equity shares, preference shares eligible for capital status, subordinated debt instruments, hybrid debt capital instruments and any other instrument approved as in the nature of capital will now be included in the prudential limit of 10 per cent of the investing banks/FIs' capital funds.

Hitherto, a bank's aggregate investment in Tier II bonds issued by other banks and financial institutions was permitted up to 10 per cent of the investing bank's capital funds (Tier I plus Tier II capital). Banks/ FIs, which currently exceed the specified limits, can apply to the Reserve Bank of India within 45 days along with a definite roadmap for reduction of the exposure within prudential limits, said the central bank in a circular issued to chief executives of all scheduled commercial banks and FIs, excluding regional rural banks. Banks/FIs should not acquire any fresh stake in a bank's equity shares, if by such acquisition, the investing bank/FI's holding exceeds 5 per cent of the investee bank's equity capital, said the circular.

Investments in the instruments issued by banks/Fis, such as equity shares, preference shares eligible for capital status, subordinated debt instruments, hybrid debt capital instruments and any other instrument approved as in the nature of capital which are not deducted from Tier I capital of the investing bank/FI, will attract 100 per cent risk weight for credit risk for capital adequacy purposes, according to the circular.

NHB refinancing up at Rs 3,523 crore
New Delhi: The National Housing Bank (NHB) has recorded refinance disbursement of Rs 3,253 crore for the year ended June 30, 2004, a 20 per cent rise over the previous year's disbursements of Rs 2,710 crore. Out of the Rs 3,253 crore, Rs 1,701 crore was disbursed towards Golden Jubilee Rural Housing Finance Scheme (GJRHFS), a scheme introduced in 1997-98. Rural housing accounted for 52.28 per cent of the annual refinance disbursements. Its net NPAs continued to be nil on June 30.

Max NY Life to tie up with banks for bancassurance
Pune: Max New York Life is in talks with a number of large banks in order to develop its business through the bancassurance route. The company, which is now revving up its bancassurance business, will look at large banks with larger market penetration. The company is also looking at developing its bancassurance business through relationships with small banks for which it will provide customised products, The company said that it has crossed the three lakh mark in the number of policies sold, garnering Rs 12,000 crore in sum assured in the process.

Dhanalakshmi Bank to outsource ATM operations
Kochi: Dhanalakshmi Bank has said that it would completely outsource its ATM services and requirements from Euronet Services India Ltd. Euronet would provide the bank asset management services, which would include procurement of ATMs, VSAT, UPS, air-conditioners and ATM site construction, for which the bank would only make monthly service charges. Euronet would also manage the entire ATM backbone, network installation and management. SEuronet has just completed its first full year of operations in India.

6 July 2004

Rupee up 5 paise
Mumbai: The rupee closed at 45.82/84 on Monday, five paise above Friday's close of 45.87/89.

Forward Market: The six-month forward closed at 1.33 per cent (1.67 per cent), while the twelve-month forward closed at 1.16 per cent (1.53 per cent).

G-Secs: The 8.07 per cent 2017 paper closed about 50 paise higher at Rs 118.30. The 10-year benchmark 7.37 per cent 2014 paper closed at Rs 112.47.

Call Rates: Were at 4.25-30 per cent.

Forex reserves cover imports for 17 months
Mumbai: The Reserve Bank of India's investments in international securities increased to $35.02 billion for the financial year ended March 31, 2004, from $ 26.92 billion in the previous fiscal year.
In its report on Foreign Exchange Reserves 2003-04, the apex bank has disclosed that during this period, it deposited $45.9 billion with other central banks and the Bank for International Settlements and $26.5 billion in the form of deposits with foreign commercial banks.

The ratio of volatile capital flows-including cumulative portfolio inflows and short-term debt- to reserves declined to 36.0 per cent as at end-March 2004, from 146.6 per cent as at end-March 1991. During 2003-04, the Government carried out prepayment of certain high cost loans to IBRD and ADB amounting to $2.6 billion. The import cover of foreign exchange reserves as at end-March 2004 increased to 17 months, from 14 months of imports or about five years of debt servicing as at end-March 2003 and 11.3 months in March 2002, and 3 weeks of imports as at December 1990.

5 July 2004

SBI MF launches Floating Rate Plan
The SBI Mutual Fund has launched the Floating Rate Plan (FRP) with its Magnum Income Fund and has said it hopes to raise Rs 500 crore during the Initial Public Offer (IPO) period. The FRP will invest in floating rate debt securities, fixed rate securities, derivative instruments as well as money market instruments. The plan will be open for initial issue for ten days beginning July 5 and will reopen for continuous sale and purchase on an ongoing basis from July 19.

The FRP Short-term Plan (STP) will have two options for investment - Dividend Option and Growth Options. The Long-term Plan (LTP) will have Regular as well as Institutional Plan and both would have options of Dividend and Growth.

Three new LIC schemes await IRDA approval
Rajahmundry: The Life Insurance Corporation of India has plans to introduce three new policies, that is, for high net-worth individuals, for children and a unit-linked pension plan.
It says that it is waiting for IRDA approval.