14 Aug 2004
Bond prices up as rupee rise is checked
Mumbai: The domestic currency weakened by 10 paise on Friday to end at 46.31 per dollar as against 46.20/21 to the dollar on Thursday.
Forwards Market: The six-month forward closed at 2.76 per cent (2.78 per cent) while the twelve-month closed at 2.41 per cent (2.46 per cent).
G-Secs: Bond prices shot up by over a rupee with the central bank announcing the introduction of overnight fixed rate repo from August 16.
Debt market players perceive this as a signal from the Reserve Bank of India (RBI) to improve liquidity. The 10-year benchmark 7.37 per cent 2014 paper closed at Rs.105.90.
Call rates: Easy at about 4.25 per cent.
RBI introduces overnight fixed rate repo from Aug 16
Mumbai: The Reserve Bank of India has announced introduction of the overnight fixed rate repo at 4.50 per cent under Liquidity Adjustment Facility with effect from August 16, 2004. The call rates had hardened during the past three days, up to 5.50-5.75 per cent.
Analysts said tightening of liquidity in the inter-bank market has led to this measure being taken by the central bank. It will improve liquidity conditions, as surplus funds will be available in the inter-bank market now as funds could be parked with the RBI for only a day now and could be withdrawn at short notice, they said. This is in addition to the existing overnight fixed rate reverse repo at 6.00 per cent. The current practice of 7-day Repo and 14-day Repo will also continue, said a RBI release.
The operational guidelines and terms and conditions of the auction under the LAF would be applicable as at present, the release said.
United India and Indian Bank tie up
Chennai: United India Insurance Company is launching 'Arogya Raksha', a scheme to provide mediclaim coverage in association with the Indian Bank. The scheme provides coverage for all Indian Bank account holders. It gives them compensation benefits for hospitaliation. The insured person and three family members (spouse and two children) are covered under the scheme. These policies will be marketed by the Indian Bank at all its branches.
13 Aug 2004
Rupee firms up; bonds decline
Mumbai: The domestic currency strengthened for the third session in a row to close at 46.20/21 on Thrsday against the dollar, up 10 paise from the previous close at 46.30/31.
Forwards Market: The six-month forward closed at 2.78 per cent (2.80 per cent) while the twelve-month forward ended at 2.46 per cent (2.45 per cent).
G-Secs: Bond prices fell by about a rupee. The yield on the 10-year benchmark 7.37 per cent 2014 paper rose to 6.64 per cent. The 11-year benchmark 7.38 per cent 2015 paper fell 80 paise to close at Rs.105.10.
Call rates: After rising to 5.60-6 per cent during the day, eased off towards the end of the day to 4.80 per cent
RBI transfer dividend to GOI
Mumbai: The Reserve Bank Board has, in its meeting held today, decided to transfer a dividend of Rs.5, 400 crore to the Government of India out of its surplus profit for the year ended June 30, an RBI spokeperson confirmed in a release issued on Thursday.
RBI cancels Bellampalli co-op bank's licence
Hyderabad: The Reserve Bank of India has cancelled the licence of the Bellampalli Co-operative Urban Bank Ltd located at Bellampalli in Andhra Pradesh to carry on banking business. In a press release, the RBI said the co-operative urban bank was precluded from transacting the business of 'banking' as defined in the Banking Regulation Act, 1949 (as applicable to Co-operative Societies). The Bellampalli bank was prohibited from accepting deposits from public and allow withdrawals by cheque, draft, order or otherwise.
The RBI has cancelled the licence under Section 22 of the Banking regulation Act, 1949 (as applicable to Co-operative Societies), the release said.
12 Aug 2004
Indian trade fair in Lanka in October
Hyderabad: The Sri Lanka Exhibition and Convention Centre is organising the five-day Indian Trade Fair-2004 (ITF-2004) in Sri Lanka, beginning on October 13. The ITF, to be held at the expo facility in Colombo, would focus on diverse trade opportunities in the bilateral trade. The major items identified for display at the ITF were automobile components, agricultural implements, building materials, chemicals, glassware, computer software, consumer durables and non-durables, and jewellery.
OVL to transfer stake in Sudanese oil blocks
New Delhi: ONGC Videsh Ltd (OVL) will transfer 3 per cent of its stake in two Sudan oil blocks to Sudapet, Sudan's national oil company. The Cabinet Committee on Economic Affairs (CCEA) has approved OVL transferring 2 per cent of its stake in Block 5A and one per cent in Block 5B to Sudapet, officials said. OVL currently has 26.125 per cent stake in Block 5A and 24.5 per cent in 5B.
TRAI: One-time entry fee and revenue sharing for FM radio
New Delhi: The Telecom Regulatory Authority of India (TRAI) has suggested allowing existing private FM radio operators to migrate from a licence-fee regime to a revenue-sharing agreement. It has, however, not commented about hiking the foreign direct investment (FDI) ceiling, leaving it to the Government to decide on the issue. Currently, foreign institutional investors are allowed to invest up to 20 per cent in the radio business, while 20 per cent FDI is permitted in Direct-to-home (DTH) broadcasting. News channels uplinking from India can have 26 per cent equity while the cable industry can attract up to 49 per cent foreign investment.
In its Recommendations on Licensing Issues Relating to the Second Phase of Private FM Radio Broadcasting, the telecom regulator has suggested payment of a one-time entry fee and a revenue share of 4 per cent of the yearly revenue as annual fees. For migration to the new arrangement, it has said that operators must be allowed to do so by paying up all pending dues and withdrawing pending litigations. The suggestion to switch to a revenue-sharing arrangement was mooted after private FM companies told the Government that they were making losses of over Rs.120 crore.
Biotech industry shows healthy all round growth
Bangalore: The domestic biotechnology industry, is set to cross the magic figure of $1 billion in revenue this year, as per a latest survey. A healthy 39 per cent growth in revenues during 2003-04 has put the industry at Rs.3, 265 crore, says the second joint annual survey conducted by the magazine BioSpectrum and the industry body ABLE (Association of Biotechnology-Led Enterprises). Despite several hurdles in its path the sector could expect investments worth Rs.850 crore next year, up from Rs.635 crore. The number of companies in the sector has grown to 235. The first survey conducted last year had put the industry at 135 companies with total revenues of Rs.2, 345 crore.
The industry had healthy interactions with the Government, which through the Department of Biotechnology, is examining a supportive policy, regulatory issues and also models for financing biotech start-ups. Internationally too, Indian capabilities have been noticed; with 9,100 professionals forming arguably the world's largest talent pool, Indian biotech industry ranks third in Asia, while facing some competition from China. The headcount could go to 11,000 this year.
Recombinant vaccines had a huge potential in the regulated markets and Indian generic biodrugs could expect to see some welcome regulatory measures in the US and Europe. The survey has identified top two leading groups: the Pune-based vaccines major, the Serum Institute of India and Biocon, which have each crossed Rs.500 crore in revenue and accounts for a third of the industry size. The Rs.555-crore Serum is the largest biotech group and Biocon follows close behind at Rs.549 crore. In the sale of biotech products, Biocon, with revenue of Rs.502 crore, is ahead of Serum in the top 20 league. The others are Panacea Biotec with Rs.149-crore sales of biotech products; Nicholas Piramal with Rs.130 crore; and Novo Nordisk at No. 5 with sales of Rs.110 crore.
11 Aug 2004
Rupee firms up; bond prices fall
Mumbai: The domestic currency ended Tuesday on a stronger note at 46.35/36 per dollar closing seven paise higher from the previous day's close at 46.42/43.
Forwards Market: The six-month forward closed at 2.53 per cent (2.48 per cent) while the 12-month closed at 2.28 per cent (2.15 per cent).
G-Secs: The 10-year benchmark, 7.37 per cent 2014 paper fell about 80 paise from morning levels to close at Rs.105.95 at the yield of 6.53 per cent. The yield on the 11 year floating rate paper issued on Monday rose to 5.18 per cent before closing at 5.13 per cent at Rs.99.90.
Call rates: The call rates were tight at about 4.25-4.60 per cent.
Vijaya Bank opts for Bank Alert warning system
Chennai: Vijaya Bank will install BankAlert, an early warning system to detect money laundering, fraud and out-of-profile behaviour of customers and accounts. Wipro Technologies would be the system integrator for the deployment and the software was being integrated with Finacle, the core banking software from Infosys.
The software would be a central installation as part of the bank's core banking solution. Bank officials said it would soon be operational in about 360 existing branches and 50 new branches. About 75 per cent of the bank's business is routed through these branches. The software would enable the bank to put every transaction through a validation check that would detect any abnormal transfer of funds to "undesirable hands".
LVB ties up with Wall Street for NRI remittances
Chennai: Lakshmi Vilas Bank (LVB) has entered into a tie-up with Wall Street Exchange Centre, LLC, Dubai, to provide NRIs the opportunity to remit rupees through select branches. LVB's press release said the service can be used once a customer opened a designated depository account at Dubai with a local bank and Wall Street's NRI account.
10 Aug 2004
Mumbai: The rupee fell sharply from early highs on back of huge dollar demand to close at 46.42/43 per dollar on Monday, weaker by about five paise from Friday's close of 46.3750.
G-Secs: Prices plunged by over a rupee on Monday as yields rose to their highest in eighteen months, as the Government debt sale had higher than expected yields amid fears of rising interest rates. The yield on the 10-year benchmark 7.37 per cent 2014 paper rose to 6.48 per cent, up 20 basis points from Saturday's close. The price on the security fell about Rs.1.50 as it plunged to Rs.106.35.
RBI freezes operations of South Indian Co-op Bank
Mumbai: The Reserve Bank of India on Monday froze all operations of The South Indian Co-operative Bank Ltd. It allowed depositors to withdraw a sum not exceeding Rs.1,000 from the Mumbai-based urban co-operative bank. The bank is not allowed to advance any fresh loans. In a statement issued on Monday, the RBI said as at the close of business on August 9, 2004, "Withdrawal is allowed for depositors up to a sum not exceeding Rs.1,000 of the total balance in every saving bank or any other deposit account by whatever name called," RBI said.
Renewal of the existing term deposits on maturity in the same name and same capacity is permitted, said the release. Relaxation of the directive will be considered on review. As news of the bank's ailing financial status spread, anxious customers thronged its branches and withdrew deposits en masse. The alarm bells were sounded when the bank released its balance sheet a few days ago, which showed staggering losses to the extent of Rs.35.84 crore in the financial year ended March 31, 2004, against a profit of Rs.1.02 lakh in the previous year.
During this period, the gross and net NPAs of the bank zoomed to 53.76 per cent and 51.70 per cent respectively, against the gross and net NPAs of 9.81 per cent and 4.33 per cent in the previous period. The bank's networth was eroded by Rs.1,018.34 lakh even as its capital adequacy ratio slipped to - 17.52 per cent. RBI ranked the bank at 'D' for its audit classification, which is reflective of the bank's poor financial health. Raghavan Sarathy, Chairman, The South-Indian Co-operative Bank, in turn has blamed the "reckless reports" in the media for the mass panic of the depositors. He claimed that the bank's liquidity position was very comfortable and that it will be able to meet the needs of the depositors.
HDFC Bank to hike capital market exposure
Mumbai: The HDFC Bank has said that it has applied to the RBI for increasing its capital market exposure limits from the current five per cent.
Speaking on capital market exposure of banks, the bank said that it's exposure was within the current limit of 5 per cent of loans outstanding at the end of the previous fiscal. According to the bank, the default rate for the business in this area has been less than one per cent. The bank also plans to increase its network to 400 branches by the end of this fiscal.
Nabard's refinances KSCARDB
Thiruvananthapuram: The Regional Office of Nabard here has released schematic refinance to the tune of Rs.15.29 crore to the Kerala State Cooperative Agricultural and Rural Credit Bank (KSCARDB).
An official spokesman said here that, of this, Rs.9.47 crore was directed to the rural housing sector while the rest would go into various non-farm sector activities, including road transport operators. The applicable rates of interest ranged from 5.5 per cent to 6.5 per cent per annum.
Lord Krishna Bank joins RTGS
Bangalore: Lord Krishna Bank has joined the real time gross settlement systems of the Reserve Bank of India, a bank news release said.
9 Aug 2004
Forex reserves dip by a billion dollars again
Mumbai: The country's foreign exchange reserves Reserves declined by $1.256 billion for the week ended July 30, to touch $118.319 billion against $119.575 billion the previous week, when it dipped by $1.531 billion, as per the latest RBI statistics. The reserves have dropped by over $1 billion for the second consecutive week. A weakening of major currencies like euro, pound sterling and yen also led to a decline in the foreign currency asset position, which include the effect of appreciation or depreciation of non-US currencies in reserves, expressed in dollar terms.
Foreign currency assets declined by $1.248 to touch $112.967 billion against $114.215 billion in the preceding week, according to RBI's Weekly Statistical Supplement. The reserve position in the IMF dipped by $8 million to touch $1.293 billion. The funds parked by the banks in repos with the central bank as on July 30 were about Rs 53,000 crore. The amount has marginally declined from the previous week when it was around Rs 58,000 crore.
SBI rates on short-term deposits slashed
Mumbai: The State Bank of India has trimmed interest rates on its short-term domestic term deposits by 25 basis points, effective August 9. Interest rates on short-term deposits with maturity between 15-45 days and 46-179 days have been pruned by 25 basis points to 3.75 per cent per annum and 4.25 per cent per annum respectively, said a press release. The bank has also decided to discontinue the domestic term deposits with a maturity period of 7 days to 14 days for Rs.15 lakh and above.
There is no change in interest rates of term deposits with maturity period of 180 days and above. For term deposits of 180 days to less than one year, and one year to less than three years and three years and above, the interest rates shall continue to remain at 4.75 per cent per annum, 5 per cent per annum and 5.25 per cent per annum, respectively. Senior citizens will continue to receive higher interest rates of 50 basis points for domestic term deposits with maturity of one year and above.
Allahabad Bank raises FCNR rates
Kolkotta: Allahabad Bank has raised the interest rates on foreign currency non-resident deposits. The new rates on US dollar deposits are 2.16 per cent (earlier 2.08 per cent) for one year to less than two years, 2.89 per cent (2.79 per cent) for two years to less than three years, and 3.35 per cent (3.28 per cent) for three years.