28 Aug 2004

Securities rally, rupee in range
Mumbai: The rupee closed steady at 46.30 per dollar on Friday in a range-bound forex market, as against Thursday's closing of 46.33.

Forwards Market: the six-month premium ended at 2.48 per cent (2.49 per cent) and the premium for one year ended at 2.16 per cent (2.12 per cent).

G-Secs: Bond prices rallied by over one rupee across maturities on Friday. The benchmark 10-year 7.37 per cent 2014 yield ended lower at 6.09 per cent at Rs.109.35.

Call rates: Easy at 4.25 levels.

Award for Corporation Bank
Mangalore: Corporation Bank has won the "Best Bank Award for Delivery Channels" from the Institute for Development and Research in Banking Technology (IDRBT).

A bank release said here that the Governor of Reserve Bank of India, Dr Y.V. Reddy, presented the award to the Chairman and Managing Director of Corporation Bank, K. Cherian Varghese, in Hyderabad on Friday.

The release said that the bank has won the IDRBT award for the third consecutive year. Earlier, it had bagged the "Best Bank Award for Excellence in Banking Technology" in 2001 and the "Best Bank Award for Innovative Usage and Application on INFINET (Indian Financial Network)" in 2002.

KSFC and IFFCO in pact for non-life products
Bangalore: The Karnataka State Financial Corporation (KSFC) has signed a corporate agency agreement with IFFCO Tokio General Insurance to further strengthen the marketing of non-life products.

KSFC had diversified its activity into distribution of insurance products in 2002 and had mobilised a cumulative premium income of Rs.2.17 crore till July this year.

With recognition as the corporate agency by the IRDA, KSFC hopes to achieve an insurance business of Rs.4 crore during the current fiscal. KSFC, a State public sector unit, is among the earliest to be awarded the license to conduct insurance business as a corporate agent.

KSFC, with its network of 31 branches across the State, hopes to expand its diversified business insurance products distribution in addition to strengthening its core business of providing loan assistance to small-scale in units. It has extended a cumulative assistance of Rs.7,184 crore to more than 1.54 lakh units so far.

RBI: New norms for loans against NRI deposits
Mumbai: In a bid to reduce possibility of frauds, the Reserve Bank of India has mandated that applications for loans against non-resident Indian (NRI) deposits be forwarded through a bank branch in the country where the deposit holder resides. In a circular issued to all scheduled commercial banks, the RBI said this decision is also aimed towards facilitating legitimate transactions.

"The preferable procedure would be to route such requests through the bank branch at which the concerned NRI is maintaining his accounts,' the RBI has said. The routing of the loan requests through the suggested procedures would ensure due diligence and compliance with 'Know Your Customer' norms by that branch. A copy of the passport of NRI should also preferably accompany the application for loan against NRI deposits. These instructions of RBI come in wake of the observations of the Committee on Procedures and Performance Audit (Tarapore Committee), which examined the previous instructions in respect of such loans.

TMB extends business hours
Madurai: Tamilnad Mercantile Bank has extended its business hours by an hour and half. The bank has also taken several initiatives to improve service to its customers.

Dhanalakshmi Bank goes live on RTGS
Kochi: The Thrissur-based Dhanalakshmi Bank has gone live on RTGS (real time gross settlement) for

27 Aug 2004

Bonds crash
Mumbai: Bond prices crashed by around one rupee across maturities on Thursday due to aggressive sell-offs. The domestic currency ended at Rs.46.33/3350 marginally stronger as compared to Wednesday's closing at Rs.46.35/37.

Forwards Markets: The six month premium ended at 2.49 per cent (2.55 per cent) and the one year at 2.16 per cent (2.22 per cent).

G-Secs: The 10 year bench-mark yield on the 7.37 per cent 2014 paper hardened to 6.27 per cent at Rs.107.90.

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

Market stabilisation scheme ceiling raised to Rs.80,000 crore
Mumbai: The Government has raised the ceiling of the Market Stabilisation Scheme (MSS) to Rs.80,000 crore from the existing level of Rs.60,000 crore. The revision was made by the Government as per the request of the Reserve Bank of India.

The threshold limit of amount outstanding under the MSS has crossed the Rs.50,000 crore mark and the RBI had accordingly informed the government, said an RBI press release.

The threshold level at which the ceiling will be reviewed in the future, has also been revised upward to Rs.70,000 crore from Rs.50,000 crore previously.

The indicative schedule of issuance of securities under MSS for the quarter July-September 2004 has remained unchanged.

HDFC Bank opens 24-hour branch
Mumbai: HDFC Bank has opened its first 24-hour branch at the International Air Cargo Complex in Mumbai. The customers will be now offered various current account facilities at the Airport Authority of India (AAI) branch including 24-hour payment facility, funds transfer, forex services, inward or outward remittances and trade finance services, said a press release.

The collections of and payments of the funds across India can be arranged through the bank's on-line real time banking with its entire branch network.

RBI allows withdrawals on Prudential Cooperative
Hyderabad: The Reserve Bank of India on Thursday allowed the financially struggling, Prudential Co-operative Bank Ltd to permit withdrawal of a sum not exceeding Rs.20,000 in any deposit account by a depositor.

The disbursement programme would be put in place by the co-operative bank and announced shortly, the Managing Director said in a press release.

The RBI directive said that the mentioned sum in any deposit account, by whatever name called could be withdrawn by a depositor provided that the depositor is having liability to the bank - either as a borrower or surety, and the amount may be adjusted first to the relevant borrowal accounts.

26 Aug 2004

G-Secs move up as Rupee weakens
Mumbai: The rupee weakened once again against the US currency for the second consecutive session to close at 46.35/37 a dollar.

Forwards Market: The six-month forward closed at 2.55 per cent (2.68 per cent) while the 12-month forward finished at 2.22 per cent (2.35 per cent).

G-Secs: The 10-year benchmark 7.37 per cent 2014 paper closed at a yield of 6.19 per cent, down nine basis points from the previous closing yield at Rs.108.55. The 11-year benchmark 7.38 per cent 2015 rose 60 paise to close at Rs.108.60.

Call Rates: In the range of 4-4.50 per cent.

Indian Bank Q1 net rises to Rs.118 crore
Chennai: Indian Bank's net profit for the first quarter, ended June, is at Rs.118.13 crore, about seven per cent higher than in the same quarter last year. Operating profit was up 43 per cent at Rs.158 crore.

During the quarter, the bank recovered Rs.62 crore, which helped lower net NPAs to 2.43 per cent of advances, from 2.71 per cent as on March 31, 2004. After the recent tier-II bond issue, the bank's capital adequacy ratio had risen to over 15 per cent.

Tata Finance authorised capital to go up
Kolkata: Tata Finance Ltd will increase its authorised capital with a fresh absorption of cumulative redeemable preference shares for Rs.175 crore.

With this absorption the company's authorised capital base will rise from Rs.745 crore to Rs.920 crore. The existing capital base is divided into 40 crore equity shares of Rs.10 each, 3.75 crore of cumulative redeemable preference shares of R.100 each and 1.45 crore cumulative convertible preference shares of Rs.100 each.

The increased portion of the capital base will consist of Rs.1.75 crore cumulative redeemable preference shares of Rs.100 each. The company has sought the consent of its shareholders for making the necessary amendments at its coming annual general meeting (AGM).

For the year ended March 31, 2004, Tata Finance's total income dropped to Rs.322.08 crore from Rs.401.45 crore in the previous financial year. However, it registered a net profit of Rs.16.76 crore against a net loss of Rs.49.67 crore in 2002-03.

Meanwhile, the company has discontinued fresh financing activities for leasing as well as corporate lending. After repayments, the total lease portfolio has reduced to Rs.163 crore as on March 31, 2004, from Rs.212 crore on March 31, 2003.

ING Vysya's ECB offering oversubscribed
Bangalore: The ING Vysya Bank's maiden syndicated external commercial borrowing offering was oversubscribed. The bank had approached the markets for a facility of $50 million, but with the issue being oversubscribed it has decided to retain $70 million.

Higher cut-off price for Treasury bills
Mumbai: The weekly auction of the 91-day Treasury bill worth Rs.2, 000 crore witnessed a higher cut-off price of Rs.98.84 against the previous week's cut-off price of Rs.98.79.

The yield at the cut-off price ended lower at 4.70 per cent against 4.91 per cent for the preceding auction.

Some 87 bids worth Rs.7,680 crore were received, of which 13 bids worth Rs.2,000 crore were accepted, said a Reserve Bank of India (RBI) release.

ICICI Bank launches 'Easy Deposit' card
Mumbai: ICICI Bank Ltd. has announced the launch of 'Easy Deposit Card', a credit card available to the bank's customers with a fixed deposit account.

The card will be offered free to both existing and new customers said a press release. The card will be available with fixed deposits of tenure one year and above with a minimum balance of Rs.40, 000 and Rs.20,000 required in the account depending on whether the variant is Gold or Silver. A credit limit of up to 90 per cent of the fixed deposit value will be offered till the deposit is active.

Bank unions plan another stir as IBA rules out hike
Chennai/Mumbai: Another bank strike is on the cards with the unions planning a two-day strike on October 5 and 6 to press their demands for wage revision. They struck work just this week on Tuesday.

The United Forum of Bank Unions (UFBU), which met in Mumbai, has decided to meet the Indian Banks Association (IBA) Chairman on August 31 to urge him to settle the issue.

The UFBU has declared agitations, mass rallies and centralised demonstrations to be held on September 8, a dharna before the banking division of the Ministry of Finance on September 15, and demonstrations at the branch and office levels of banks on September 22, a day where employees will wear badges in protest on September 27.

All this will finally culminate into nationwide bank strikes on October 5 and 6.

25 Aug 2004

As bonds go up, Rupee loses
Mumbai: The domestic currency ended weaker by about four paise at 46.3050/3150 per dollar on Tuesday. The rupee had closed at 46.26/27 on Monday.

Forwards Market: The six-month forward closed at 2.68 per cent (2.70 per cent) while the twelve-month forward ended at 2.35 per cent (2.29 per cent).

G-Secs: Closed higher by nearly 70-80 paise. The 10-year benchmark 7.37 per cent 2014 paper rose 70 paise during the day to end at Rs.107.85 at a yield to maturity of 6.28 per cent. The 11-year benchmark 7.38 per cent 2015 paper finished at Rs.107.90.

Call rates: In the range of 3.50-4.50 per cent.

Strike affects banking operations
Mumbai: Banking operations throughout the country were hit today as public sector bank employees struck work demanding a wage revision. Cheque clearing, forex transactions and trading in government securities were affected.

According to an RBI spokesperson, 30 banks did not participate in the Mumbai clearing house operations. Normally, 112 banks participate in the operations. The value of cheques cleared dropped to Rs.1,400 crore from the average of Rs.8,900 crore on a normal working day.

Inter-bank high-value cheques cleared were merely 75 in number worth Rs.33 crore, against around 600 cheques worth Rs.960 crore on normal days. Number of instruments traded also plunged to 3,600 from 12,000. RTGC transactions were only 478 worth Rs.8,830 crore, against the normal daily average of 1,400 transactions worth Rs.11,000 crore.

According to the United Forum of Bank Unions (UFBU), the existing wage pact was concluded in 2000 and had expired in October 2002. The forum has been negotiating with Indian Banks' Association (IBA) since July 2, said a press release. The unions are demanding a 20 per cent rise in wages while IBA has agreed to a 9.5 per cent hike. Nine lakh employees, including officers participated in today's strike, the forum said.

StanChart launches Manhattan - a lifestyle credit card
Bangalore: The Standard Chartered Bank has launched 'Manhattan' - a global lifestyle credit card, which breaks away from the 'one size fits all' concept, to give users a wide choice. The bank said that With Manhattan will set lifestyle benchmarks and will soon be a way of life as customers demand more flexibility, customisation and their need to be heard. The product, successful in Hong Kong and Singapore, will target the ambitious, upwardly mobile Indian segment.

24 Aug 2004

G-Secs bounce back as rupee firms up
Mumbai: The domestic currency closed firmer at 46.26/27 on Monday as against the previous close of 46.32/33.

Forwards Market: The six-month forward closed at 2.70 per cent while the twelve-month forward closed at 2.29 per cent.

G-Secs: Monday saw the highest price gain for G-Secs in about 10 months. The 10-year benchmark 7.37 per cent 2014 paper surged about Rs.1.30 to close at Rs.107.35 as its yield dipped sharply by 17 basis points to end at 6.34 per cent. The 11-year benchmark 7.38 per cent 2015 paper rose by Rs.1.50 as it closed at Rs.107.45.

Call rates: were in the range of 4.20-4.50 per cent.

S&P upgrades India currency rating outlook
Mumbai: International rating agency, Standard and Poor's (S&P) has upgraded India's 'BB' long-term foreign currency rating outlook to "positive" from stable. The outlook on the `BB +' long-term, local currency rating has also been raised to stable from negative. "The outlook revisions reflect India's improving external liquidity and better prospects for the governments debt burden to stabilise," said a press release.

In addition, the country's robust foreign exchange reserves, which exceed 2000 per cent of the short-term debt, mitigate the risk of volatility in external confidence, the agency said. S&P has affirmed all the ratings on India - foreign currency BB/Positive /B, local currency BB + stable/B.

The outlook on the Export-Import Bank of India's 'BB' long-term foreign currency rating has been revised to positive from stable. The country's external debt and debt service burden is expected to fall due to strong export growth and non-debt foreign capital inflows, which should help offset the impact of rising imports given the surge in oil prices.

The country's total external debt is likely to fall below 100 per cent of current account receipts for the current fiscal year ending March 31, 2005 compared with over 200 per cent in the fiscal 1993. However, S&P has observed that the sovereign ratings on India remain constrained by high public debt and serious fiscal inflexibility. "The country's fiscal weakness is the worst among rated sovereigns, leaving it particularly vulnerable to economic cycles and any decline in growth rates," the agency said.

S&P ratings: UTI Chief dubs it 'externally driven pessimism'
Mumbai: Expressing himself strongly, by way of a reaction to the Standard and Poor's upgradations of India's long-term foreign currency and local currency rating outlooks, M. Damodharan, Chairman, UTI and IDBI, said, "Often there have been ratings without an understanding of what the strengths are in this country. I don't see fiscal deficit as a serious concern and feel that we are obsessed with it. Many times, you are looking at a number in isolation and not looking at whether the investment in the short-term that is leading to fiscal deficit leads to growth in the long run.' Damodaran was speaking at the sidelines of a 'cyber-safety' conference. "Don't allow externally-driven pessimism to impede in development,' he said.