Rupee plunges to all-time low of 47.02
Mumbai: The rupee hit a new low of 47.03 against the dollar on Monday and closed at an all-time low of 47.00/02.

In late afternoon deals, however, it recovered somewhat and was traded in the 46.96/47.06 levels.
Forex market analysts had earlier said there was little cause for concern since foreign fund inflows remained intact.

The rupee was marginally weaker than its previous low of 46.97 on Thursday.
There was a brief moment of respite as large state-run banks, which normally act on behalf of the Reserve Bank of India, sold dollars. Dealers said they did not expect any major movements in the rupee unless big capital outflows happened.

Senior forex market analysts said the rupee could fall by another 1 per cent to be fairly valued on the real effective exchange rate, an index based on a trade-weighted basket of currencies, following recent falls in many Asian currencies.
The rupee has been ruling steady over the last eight to nine months despite an arms bribery scandal, a scam on the stockmarket, weakening regional currencies and signs of slowing exports.

Some observers felt that RBI's was responsible in a way for the fall of the rupee.
The said that RBI could not afford a strong rupee, as it would put Indian exporters at a disadvantage.
The RBI apparently had mopped up over $200 million in the forex markets early last week in a bid to keep the rupee from appreciating further against the dollar.
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Lenders to revisit exposure to cellular telephony
Mumbai: With the entire economics of telecom industry set to change after the introduction of Wireless-in-Local-Loop (WLL) by fixed-line operators, lenders to cellular telephony operators are set to revisit their existing loan-exposures to the sector. These loan exposures are conservatively estimated at around Rs 7,500 crore.

Sources in local financial institutions and banks — ICICI, Industrial Development of India, Industrial Development and Finance Corporation, State Bank of India — and a clutch of foreign lenders — ABN Amro Bank, ANZ Investment Bank, Deustche Bank, Bank of America, Toronto Dominion Bank — are concerned that the introduction of WLL will alter the telephony-landscape, and force them to revisit the credit-risks inherent in such loans.

This essentially means that current loans will not be recalled, but additional exposures and funding requests will have to wait. Bankers are also evaluating the quality of telecom loans on their overall balance sheet, given the sectoral caps on lending.

While it was pointed out in certain quarters that WLL — by definition being "limited mobility" — may not alter the business of the cellular operators, leading bankers qualified: "It remains to be seen to what extent the benefits under the National Telecom Policy 1999 is eroded by the introduction of WLL". Foreign bankers were categorical that the beneficial move of evaluating cellular telephony projects as project finance-credit with non-recourse to promoters post-NTP 1999 will be stalled.

"It is now clear that additional fund raising — by way of bank-loans, equity, and venture funding — will have to wait for some time until there is some stability in the ground rules", a leading foreign banker said.

Performance-parameters that are seen undergoing a radical change post-WLL are; revenue per subscriber, national rollout-timeframes and the ability to service loans. WLL may enhance pressure on cellular-operators to increase the subscriber base in such a way that it increases revenues too: the point at which that happens is anybody’s guess at this point in time.

It might be recalled that several cellular operator did not meet the roll-out and revenue-per-subscriber loan-covenants, and the lobbying for a shift to a revenue-sharing regime from a license-fee regime, was triggered off in large measure by the same.
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Kapol bank; another victim of Madhavpura Bank crisis?
Mumbai: The latest victim of the Madhavpura bank crisis appears to be the Kapol Co-operative Bank. Two of the bank’s directors have resigned and have moved the Reserve Bank of India for supersession of its board, alleging misuse of funds by the management.

Himatbhai Goradia and Ashwin Bhuva, supported by BJP MLA Hemendra Mehta, have requested the RBI to initiate an inquiry into the alleged misuse of funds and take over the administration of the bank.

Mehta said that, "the non-performing assets (NPAs) of the bank are around Rs 63 crore -- much more than the actual figure shown by the bank. The NPAs are unrecoverable.

Kapol Bank chairman KD Vora has denied the allegations, "Our NPAs are pegged at only seven per cent -- around Rs 22 crore," Vora said. The bank has a deposit base of Rs 294 crore and advances of Rs 191 crore, he said.

Mehta however alleged that the bank had dismantled the system of clearing of advance proposals by a four-member committee and were now cleared by the chairman or vice-chairman.

According to Vora, Kapol Bank lost deposits of about Rs 70 crore within five days. He said, "The bank had deposits of Rs 350 crore till March 24 and after the Madhavpura expose we lost Rs 70 crore in just five days between March 25 and 31," he told reporters in Mumbai today.

Vora claimed that presently the bank’s deposit base had stabilised at Rs 280 crore and that the depositors were coming back to its branches.

Clarifying on Kapol bank’s involvement in Madhavpura scam, Vora said, "As a part of normal banking operations we had lent Rs 8 crore to MMCB in the form of call money and hope to soon recover the amount from the bank".
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