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Rupee moves up - securities rise
Mumbai: The rupee marginally strengthened against the dollar on Friday, opening at 43.51/52 and ending at the same level. The closing rate was slightly higher than Thursday's close at 43.53.

Forwards market: The 12 month and the 6 month premium remained unchanged at 1.32 per cent and 1.48 per cent respectively.

G-Secs: In the bond market the 7.27-8 year-2013 paper closed the day at Rs101.07 (7.09 per cent YTM). On Thursday, it had ended at Rs100.88/93 (7.12 per cent YTM). The 7.38-10 year-2015 paper closed at Rs101.50/55 (7.17 per cent YTM).

Call rates: The inter bank rates were at 5-5.10 per cent (4.95-5.5).

CBLO market: 210 trades, put through in the 4.95-5.48 per cent range, amounting to Rs9,776.15 crore, were realised.
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RBI steps down on bad loan sale amongst banks
Mumbai: In a bid to prevent the misuse of bad-loan sale on a bilateral basis, the Reserve Bank of India (RBI) has said that banks should not sell assets back to the bank from which the loans were acquired. This was indicated by the RBI in its final guidelines on the sale and purchase of bad loans.

In April, RBI had issued draft norms on the bad loan sales and had said that a bank could sell a bad loan only if the asset was classified as a non-performing asset (NPA) for at least two years, while a purchasing bank has to hold the asset in its books for at least 15 months before selling it to another bank.

Further, the RBI has maintained that NPAs should be sold only on cash basis and that the entire sale consideration should be received upfront. "The assets can be taken out of the books of the selling bank only on receipt of the entire sale consideration," say the final norms.

An asset is classified as an NPA when the borrower fails to pay interest or principal or both for more than 90 days from the due date.

The RBI has said that the sale and purchase of bad loans should be on a 'without recourse' basis and the entire credit risk associated with the NPA should be transferred to the purchasing bank.

For selling banks, states the central bank, if the sale is for a value higher than the net book value, the excess provision should not be reversed but should be utilised to meet the shortfall or loss on account of the sale of other NPAs. Sources said that this could hinder banks from selling bad loans since they would not be able to book profits, if any, on account of the sale of bad loans.
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Exim Bank to raise Rs.8,000 crore
Calcutta: Exim Bank hopes to raise Rs8,000 crore and extend $1-billion line of credit to countries like West Africa, CIS, Latin America, Bangladesh, Sri Lanka, Myanmar, Russia and Central Asian Republic in the current financial year.

"We will raise Rs3,600 crore in the domestic market by issuing commercial paper. The remaining Rs4,400 crore will be raised in foreign currency," Exim Bank chairman T. C. Venkat Subramanian has said.

Last year, the bank had raised Rs6,000 crore, split equally at Rs3000 crore, in the domestic and foreign markets.

"Providing a line of credit is an important tool of market access for the Indian companies. We provide a line of credit to the regional development banks of the respective countries or to specific ministries/departments. These loans are mostly government guaranteed and, therefore, recovery is assured," said Subramanian.

The bank will soon provide $400 million to West Africa and CIS countries for agriculture, water supply and rural electrification. Only Indian companies will be eligible to bid for these projects.

Last year, Exim Bank had extended $1-billion line of credit to Iran ($240 million), Africa ($270 million), Sri Lanka ($160 million), Myanmar ($63 million) and Vietnam ($27 million).

Exim Bank is also seriously looking at film financing as one of the key areas of investments. The bank had extended loans to three companies in the entertainment industry. All three Hindi films financed by the bank, which were released in 2004-05, were box office hits both in India and abroad. "We would like to finance films that have markets abroad," Subramanian said.

The capital adequacy ratio of the bank stood at 21.58 per cent on March 31, 2005. The bank had made a net profit of Rs258 crore in 2004-05 against Rs229 crore in the previous year.

The bank is also trying to finance the small and medium enterprises sector in a big way.
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BSNL takes group life cover for Rs.4,770 crore
New Delhi: Bharat Sanchar Nigam Ltd (BSNL) has taken a corporate group life insurance policy from the Life Insurance Corporation (LIC) for a sum assured of Rs4,770 crore. The cover is intended for its 3.5 lakh employees.

Under the scheme, 10,000 senior BSNL executives are insured for a sum of Rs5 lakhs against a monthly premium of Rs500. Of the premium, 30 per cent goes towards group coverage, while the remaining 70 per cent are accumulated in a group savings fund, which will be provided to the employees with returns.

Besides senior executives, 40,000 officers would be covered for an insured sum of Rs3 lakhs each against a premium of Rs300. The largest number comes from the 3 lakh non-executive employees who will get a life insurance cover of Rs1 lakh each.

The policy includes life insurance component, which provides cover against natural death, a double accident benefit in the case of accidental death where the claimant will get twice the sum assured.
There will also be retirement benefits in the cover.
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ICICI Bank opens two overseas branches
Mumbai: ICICI Bank has inaugurated its second branch in United Kingdom in Leicester and its fourth branch in Canada. ICICI Bank had set up its first branch in November 2003.

The branches will offer both retail and corporate banking activities, said a press release from the bank.

The bank set up its international banking group in 2002 and has a presence in ten countries. This includes three wholly owned subsidiaries in UK, Russia and Canada and branches in Singapore, Bahrain and representative offices in USA, China, UAE, Bangladesh and South Africa, the release added.
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BoB pays Rs.62 crore as dividend to Govt.
New Delhi: The Bank of Baroda on Friday paid a final dividend of Rs62.72 crore to the Government for fiscal 2004-05. The Chairman and Managing Director, Dr A.K. Khandelwal, handed over the dividend cheque to the Finance Minister, Mr P. Chidambaram.

The dividend was paid at the rate of 32 per cent on the Government's share in the bank. The bank has already paid Rs35.28 crore as interim dividend to the Government.
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Banking Results: Allahabad Bank
Allahabad Bank Q1 results
Kolkota: Allahabad bank has reported business growth of 4.04 per cent in the first quarter ended June 30. The operating profit for the bank was Rs230.37 crore during April-June 2005 as against Rs318.39 crore during the corresponding period of the previous year.

Net profit increased from Rs137.65 crore (Rs162.98 crore).

Allahabad Bank, which has mandated XLRI Jamshedpur to re-write its HR policy, expects the management school to send the first report soon. A report on BPR (business process reengineering) has been already submitted by Ernst & Young, its consultants.

It is also eyeing the southern market for business growth.
The bank has recorded a 25 per cent growth in retail credit in recent times. However, wholesale debt recorded a sluggish increase.
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