16 October 2004

Rupee unchanged - Securities up
Mumbai: The domestic currency ended at 45.86 a dollar on Friday, unchanged from its previous closing levels.

Forwards Market: The six-month premium ended at 2.40 per cent (2.52 per cent) while the one-year premium ended at 1.96 per cent (2.05 per cent).

G-Secs: The 7.38 per cent 2015 paper got dealt up to Rs104.20/22. The 6.65 per cent 2009 paper got traded up to Rs101.25/30.

Call Rates: Closed at 4.50 per cent levels in the inter-bank market.

CBLO Market: 151 trades were conducted, amounting to volumes of Rs5,026.50 crore in the rate range of 1 per cent to 4.65 per cent.

15 October 2004

As G-Secs rally the rupee holds steady
Mumbai: The domestic currency ended at 45.86 against the dollar on Thursday, almost unchanged from Tuesday's closing levels. Financial markets had remained closed in Mumbai on Wednesday due to State elections.

Forwards Market: The six-month premium ended at 2.52 per cent (2.66 per cent) and the one-year premium closed at 2.05 per cent (2.25 per cent).

G-Secs: The 7.37 per cent 2014 paper got dealt up to Rs104.30, while the 7.4 per cent 2012 got traded up to Rs103.95. The 7.38 per cent 2015 paper traded up to Rs104.05.

Call Rates: At around 4.5 per cent levels in the inter-bank market.

CBLO Market: 157 transactions were conducted for an amount of Rs5,599.75 crore in the rate range of 4.26 - 4.65 per cent.

Montek: Planning Commission identifying weaknesses in economy
Mumbai: India's foreign exchange reserves were more than adequate and the Planning Commission was working out how it could be used, the Deputy Chairman of the Commission, Dr Montek Singh Ahluwalia has said.

The Planning Commission is also conducting an exercise to identify weaknesses in the Indian economy, which have to be overcome to achieve an 8 per cent annual GDP growth target, he said.

What India is delivering through the public system towards health and education are grossly inadequate and much below what other countries in Asia are doing, he said. Ensuring devolution of power to the local third-tier level of government and ensuring that resources actually provide benefits is a related concern, he said.

The second difficulty for India, he said, is that agriculture growth has decelerated from the mid-nineties onwards. Currently, a little over 2 per cent, it must double if India is to achieve 8 per cent growth. While subsidies to agriculture are rising, and going into loss-making power and irrigation system, actual investment in agriculture has gone down, he said.

The Planning Commission through its mid-term appraisal will identify areas around which policy could be developed to deal with these issues, he said.

UTI Bank Q2 net down 28 per cent
Mumbai: UTI Bank Ltd's net profit for the second quarter of the current fiscal has shown a decline of 28 per cent at Rs46.22 crore as compared with Rs64.18 crore for the corresponding period in the previous year.

For the July to September quarter this fiscal, total income was Rs445.72 crore (Rs543.79 crore). Total interest earned increased by 14.04 per cent to Rs449.31 crore (Rs393.97 crore). Net interest income grew by 31 per cent to Rs180.72 crore on account of lower cost of funds, higher share of demand deposits along with growth in assets.

The advances of the bank grew to Rs10,498 crore from Rs7,430 crore, higher by 41 per cent.

Total expenditure (Excluding provisions and contingencies) also rose a little over 12 per cent to Rs403.33 crore compared with Rs362.78 crore in the previous second quarter.

Net non-performing assets (NPAs) declined to 1.33 per cent from 1.97 per cent in the second quarter for the previous fiscal.

The capital adequacy ratio of the bank also declined to 10.67 per cent from the previous corresponding figure of 11.24 per cent. This fall has been attributed to lower net profit for the quarter coupled with 'aggressive' growth in bank's assets.

The net profit for the half-year ended September 30 showed a marginal rise of Rs116.89 crore as compared to the corresponding figure in the previous fiscal, which was at Rs116.36 crore. Total income for the first half period was Rs983.35 crore (Rs1,091.67 crore).

SBI overseas offices networking to be done by Datacraft
Mumbai: Datacraft India has won a $1-million contract to design, build, and manage a connectivity network for all of State Bank of India's (SBI) 57 overseas offices across 20 countries.

This network will run online centralised banking applications, and is the largest of its kind in terms of the number of foreign branches involved, said a news release from Datacraft.

Datacraft has already implemented Phase I and Phase II of `SBI Connect,' and the relationship has also been extended for the foreign office project.

The foreign office project will link SBI offices worldwide to the nearest regional data centre and to its primary data centre at Belapur, off Mumbai. The three regional data centres are Belapur (Asian, African and Nigerian locations), Tampa in Florida for US branches and Swindon for the bank's UK branches. Each regional data centre will have a corresponding disaster recovery centre.

The regional disaster centres planned will be in Chennai, in Houston, Texas and in Reading, UK.

The 57 overseas SBI branches will be connected by using a mix of multi-protocol label switching, international private leased circuits and very small aperture terminals. All traffic on the wireless area network (WAN) will be Internet protocol and will run applications such as core banking, treasury and Internet banking.

Datacraft's nationwide network for SBI connects nearly 4,500 branches across 400 cities.

SBI's Indo-Nigerian looking for capital infusion
Mumbai: State Bank of India is seeking to inject additional capital or alternatively, for a joint venture partner for its subsidiary in Nigeria. The need for the bank has arisen in the wake of fresh guidelines issued by the Central Bank of Nigeria hiking the requisite capitalisation requirements for banks.

Indo-Nigerian Bank Ltd, which is a subsidiary of SBI, has been in Nigeria for the last 22 years and was set up with a capital of roughly $8 million. As per the latest regulations, SBI will have to inject an additional $180 million to keep the subsidiary up and running.

In a press release, SBI has said, "State Bank of India shall, having due regard to the business needs and other issues involved, put in its best endeavour, subject to legal and regulatory provisions, to keep the subsidiary in good standing so that the subsidiary is able to cope with the emerging changes."

SBI considers the emerging opportunities in West Africa and Nigeria in particular as encouraging, the release said. The bank expects overseas operations to contribute 15-20 per cent of its profits in the next two to three years.

SBI, which also has subsidiaries in Canada, Nepal and Bhutan, has applied to the Reserve Bank of India for opening new branches in Asia, Africa and Canada. Plans are under way to open 16 new overseas offices in the current financial year and raise the banks' presence to 36 countries with a total of 70 offices by March 2005.

At present, SBI has 54 offices across 28 countries and they contribute five-six per cent to its bottom line.

14 October 2004

$300 million syndicated loan for Reliance Info
Mangalore: Reliance Infocomm Ltd (RIC) has concluded a syndicated term loan facility of $300 million, lead arranged by ABN Amro NV, Australia and New Zealand Banking Group, Bank of Baroda, BNP Paribas, DBS Bank, ICICI Bank, Mashreqbank and Rabobank.

A Reliance Infocomm press release said that the loan has a final maturity of seven years and is the company's first ever cross border borrowing.

Broking licence of Pegasus Insurance suspended
Hyderabad: The Insurance Regulatory and Development Authority (IRDA) has suspended the broking licence of the Mumbai-based Pegasus Insurance Brokers Pvt Ltd (PIBPL) for its failure to adhere to the norms pertaining to disclosure and conduct of business prescribed by the Authority.

According to IRDA, though the Principal Officer of the broking firm, Bhaskar De, expired in January this year, the broking company failed to bring this fact to the notice of the Authority and functioned without a Principal Officer.

In a suspension notice issued on Wednesday, IRDA has also said the broking company functioned without trained manpower as required.

Andhra Bank to distribute Tata MF products
Hyderabad: Andhra Bank has entered into an alliance for third party distribution of products with Tata Asset Management, which manages the Tata Mutual Funds. The Andhra Bank has set an ambitious target of selling mutual fund products worth Rs500 crore during the current fiscal.

The bank, which tied up with Principal Mutual Fund and SBI Mutual Fund recently, sold over 8,900 mutual fund products worth over Rs48 crore in just over a month. The bank plans to achieve Rs50 crore turnover from selling the products of Tata Mutual Fund alone in the second half of current fiscal.

Tata AMC has said that it has set a target of achieving at least 100 per cent growth in assets under management (AUM) to Rs8,000 crore by the current fiscal-end.

Magma Leasing H1 up 65 per cent
Kolkata: Magma Leasing Ltd. has recorded a growth of over 65 per cent (volume terms) in its disbursements for the first half of the current financial year (ended September 30, 2004) at Rs577.75 crore, against Rs360 crore achieved in the corresponding period of 2003-04.

The total income of the company for the first half of this fiscal increased by 21 per cent to Rs45.55 crore against Rs37.67 crore for the same period last year.

The company said that 12,000 new customers have been financed in the first half, up from 7,700 last years for the same period.

13 October 2004

Rupee slips as bonds hold
Mumbai: The rupee closed marginally weaker on Tuesday at 45.8650/8725 against the dollar having closed at 45.84/85 on the previous day.

Forwards Market: the six-month forward finished at 2.66 per cent (2.65 per cent) while the twelve-month forward ended at 2.25 per cent (2.20 per cent).

G-Secs: The 11-year benchmark 7.38 per cent 2015 paper closed at Rs103.45 at a yield of 6.93 per cent. The 10-year benchmark 7.37 per cent 2014 paper finished at Rs103.90 at a yield of 6.80 per cent.

Call Rates: were in the range of 4.40-4.50 per cent.

CBLO market: 149 trades worth Rs4,772.25 crore were transacted in the rate range of 4.30-4.65 per cent.

Higher cut-off for 91 day T-bill sale
Mumbai: The Reserve Bank of India set a higher cut-off at 5.16 per cent (cut-off price Rs98.73) at the 91-day Treasury bill auction held on Tuesday. Of the 65 competitive bids worth Rs3,652.50 crore received, 56 bids worth Rs2,000 crore were accepted. A sole non-competitive bid worth Rs400 crore was also accepted at the auction. Cut-off had been set at 5.08 per cent at the previous auction.

At the 364-day Treasury bill auction, the cut-off price was fixed at Rs94.81(cut-off yield at 5.49 per cent), lower than the previous cut-off at Rs94.90.

Of the 102 competitive bids worth Rs5,175 crore, 32 bids worth Rs2,000 crore were accepted. One non-competitive bid worth Rs4.50 crore was also accepted.

Government to stick to borrowings schedule
New Delhi: The Government will stick to its market-borrowing schedule despite the upward pressure on interest rates due to high inflation.

Finance ministry officials have also indicated that there was no pressure on Government finances as they are expecting the cash position to improve after excise duty collections come on October 15-16. The govt. expects Rs17,000-18,000 crore inflow from excise duties.

The RBI had brought out an indicative issuance calendar for issue of Government securities worth Rs44,000 crore in the second half of this fiscal, which was much lower than the residual amount of Rs70,000 crore to be borrowed as per the budget target.

The Centre's gross borrowings were lower by 30 per cent at Rs66,000 crore in the first half of 2004-05 despite 21 per cent higher fiscal deficit till August. The Finance Ministry has budgeted a gross borrowing of Rs1,50,681 crore for this fiscal.

Further, the Centre's net borrowings have come down drastically by 70 per cent to Rs19,224 crore so far this fiscal from Rs63,532 crore during the same period last fiscal. The Government has budgeted a net borrowing of Rs90,365 crore for 2004-05.

SBI and LIC tie up for funding infrastructure projects
Mumbai: State Bank of India (SBI) and Life Insurance Corporation of India (LIC) have signed an MoU, which is expected to remove the problem of asset-liability mismatch for the bank in financing long-term projects and provide LIC the opportunity to increase its exposure to the infrastructure sector.

According to the SBI, with this MoU, the bank's disbursement to infrastructure will double in the next one year. The bank said that in the current fiscal, the bank has so far sanctioned loans worth Rs6,000 crore to infrastructure projects.

SBI's total exposure to the infrastructure sector stands at about Rs27,000 crore. While SBI will evaluate the projects and fund them for short term (up to five years), LIC will take the long-term risk. The bank will continue to monitor the project till the entire loan is repaid.

The agreement also provides for a switch of assets from one institution to another.

It is targeted at infrastructure projects both in the public and private sectors, covering power, telecom, ports, roads, airports, tourism, agri-processing and warehousing.

The MoU will enable LIC towards meeting its regulatory requirement of investing 15 per cent of its funds in infrastructure and social sectors.

ICICI Bank launches offshore unit in Bahrain
Mumbai: ICICI Bank has announced the launch of its offshore banking unit in Bahrain on October 10, 2004. The unit located at Manama Centre in Bahrain would offer several products such as real time remittances, savings accounts, time deposits, India-based products and private banking to NRI customers in Bahrain.

Wholesale banking services such as treasury products, trade finance and corporate finance to the bank's corporate clients would also be provided.

ABN Amro joins RTGS system
Mumbai: ABN Amro Bank has announced the start of its straight through processing (STP) on Real Time Gross Settlement (RTGS) system.

It is expected that high value clearing of cheques will benefit from this system; the high value clearing usually forms nearly 80 per cent of the value of total amount cleared. The charges for the service would be dependent on client relationship and structure of payments, bank officials said at the press conference where the announcement was made. Seventy per cent of the branches would use the system, they added.

12 October 2004

Rupee pares gains as bonds crash
Mumbai: The rupee shed gains closing at 45.84/85 per dollar, while bond prices crashed by over a rupee across maturities as yields hardened to historic highs.

Forwards Market: The six-month forward closed at 2.65 per cent (2.45 per cent) and the twelve-month closed at 2.20 per cent (2.05 per cent).

G-Secs: The yield on the benchmark 10-year paper, the 7.37 per cent 2014 paper rose to its highest levels in almost two years, touching 6.81 per cent at a price of Rs104.00. The yield on the 7.38 per cent 2015 paper rose to 6.93 per cent at a price of Rs103.40.

Call Rates: Steady between 4.50 and 4.60 per cent in the inter-bank market.

CBLO Market: 134 trades were transacted amounting to Rs4,999.20 crore.

Allahabad Bank H1 net up 91 per cent at Rs.303 crore
Kolkata: Allahabad Bank has posted a net profit of Rs.303 crore for the half-year ended September 30, 2004, as compared to Rs.143 crore in the corresponding year-ago period. Its aggregate business totalled Rs.55,350-crore mark by end-September, 2004.

On a year-on-year basis, the business has increased by 33 per cent against a growth of 12 per cent last year. The operating profit of the bank during the first half increased to Rs615 crore from Rs320 crore during April-September 2003, an increase of 91 per cent. Gross advances grew by 17 per cent against the growth of 4 per cent during the half-year ended September, 2003.

Net non-performing asset ratio declined to 1.65 per cent in end-September, 2004, down from 2.37 per cent as on end-March this year and 5.21 per cent in September last year.

Centurion Bank Q2 net up at Rs.5.26 crore
Mumbai: Centurion Bank Limited has ended the July-September 2004 quarter with a 171 per cent increase in net profit at Rs5.26 crore from Rs1.94 crore in the year-ago period, although this improvement is primarily because of a reversal of provisions, made previously, to the extent of Rs2.84 crore.

While total income edged down to Rs95.89 crore from Rs102.77 crore in the year-ago period, net interest income increased by 54 per cent to Rs42.94 crore during this quarter as compared to Rs27.83 crore in the year-ago period.

A decline in income was on account of a dip in other operating income at Rs12.64 crore (Rs26.07 crore) which includes a loss of Rs0.32 crore in treasury income.

Retail assets rose by 81 per cent to Rs1,658 crore from Rs914 crore in the year-ago period.

The bank's capital adequacy ratio stands at 9.51 per cent as compared to 2.15 per cent in the year-ago period. This is primarily because of the recent capital infusion through a rights issue. The bank raised Rs288 crore shoring up the capital adequacy ratio.

At the end of September 2004, gross NPAs stood at 10.24 per cent and net at 3.41 per cent.

Shriram Group set for insurance foray
Hyderabad: The Chennai-based Rs4,000-crore Shriram Group will become the 13 th life insurance player in the country with its foray into the insurance industry by the next fiscal.

The group says that it has already initiated negotiations with a couple of global insurance companies, which are keen to forge alliances with it both for life and non-life insurance businesses. The group proposes to consider entering the non-life insurance segment also if a good partnership model evolves.

According to the company though it would prefer to enter the insurance arena with a foreign partner, it was not very particular on this issue as it had all the strengths including the customer base, agents force and the capital required for entering into life insurance on its own.

The Shriram Group is also in talks with a few banks for roping them in as equity partners in the life insurance venture. The group estimates its initial investment requirements at around Rs100 crore with another Rs25 crore over the next few years.

11 October 2004

Bank credit up twenty per cent for the quarter
Mumbai: The credit offtake at the top 100 banking centres has risen by 19.8 per cent till June 2004 as against 10.3 per cent growth recorded a year ago, as per RBIs quarterly statistics on the deposits and credit of scheduled commercial banks.

Bank deposits at the top 100 banking centres, which account for 64 per cent of the total deposits, went up 22.4 per cent up to June 2004 over 14.4 per cent registered up to June 2003, the RBIs quarterly report has stated.

The credit deposit (C-D) ratio of scheduled commercial banks at all-India level stood at 58 per cent, with Chandigarh topping the list at 102.4 per cent followed by Tamil Nadu (89.8 per cent), Maharashtra (79.9 per cent).

At the bank group level, the report says that the C-D ratio was highest for the foreign banks at 88.9 per cent, while for other scheduled commercial banks it stood at 67.6 per cent.

The ratio stood lower for State Bank of India and associates (56.4 per cent), nationalised banks (53.4 per cent) and Regional Rural Banks (47.4 per cent).

Insurance business up 14 per cent
New Delhi: Private and PSU insurers have pushed general insurance business up by 14 per cent to Rs7,709 crore till August this fiscal, according to data released by the IRDA.

India's leading PSU insurance company New India Assurance has seen a marginal hike in its market share to 22.12 per cent. While the PSUs - New India, National Insurance, Oriental Insurance and United India - have together posted a 7.3 per cent growth, the private players led by ICICI Lombard expanded by 52 per cent, according to IRDA data.

ICICI Lombard led private insurers with 4.38 per cent share followed by Bajaj Allianz with 4.25 per cent share market.
Even though ICICI Lombard registered 72.59 per cent growth in gross direct premium at Rs337 crore, Bajaj Allianz was growing at a faster pace of 78.87 per cent at Rs327 crore in August.

Tata AIG, which registered 28.49 per cent growth, stood third among private insurers with market share of 2.74 per cent.

IFFCO-Tokio cornered 2.59 per cent of the market, growing at a pace of 38.38 per cent, while Royal Sundaram held 1.7 per cent market share, growing at 19.13 per cent.

TIIC initiatives to bring down lending rates
Chennai: Through an agreement with SIDBI (Small Industries Development Bank of India) and the State Government the Tamil Nadu Industrial Investment Corporation (TIIC) plans to bring down its lending rates to small and medium enterprises by about 2 percentage points.

Through the agreement with SIDBI and the State Government, TIIC will be able to access SIDBI refinance at 7.5 per cent against the current variable rates of 8 - 10 per cent. Its term loans, along with the Central and State subsidy schemes, are effectively pegged around 10.5 per cent. The agreement will also provide for converting about Rs61 crore of loans from the State Government to equity. This will help TIIC improve its capital base.

TIIC has also taken up with banks certain steps to retire some of its high cost debts - about Rs411 crore that carry an interest of about 14-15 per cent. Through these measures, TIIC has set for itself a lending target of about Rs275 crore during the current year against Rs200 crore last year. Some of the focus areas include windmills for captive power generation, which has emerged as a major area of investment for the textile industry. TIIC has a special rate of 10.5 per cent for windmill projects. Other areas include light engineering, automobile components and textile units.

Under the National Equity Fund, the average interest rate is about 8.5 per cent and is ideal for automobile component units.

The last financial year was a turnaround for TIIC which had speeded up loan recovery and clearing bad debts. The total recovery including principal and interest was about Rs 350 crore. In tandem with the internal restructure that has helped significant savings on interest for TIIC, it was able to bring down its cost of funds to 10 per cent from 13.75 per cent, sources said.