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Rupee dips -securities up
Mumbai: The rupee slightly weakened against the dollar on Monday ending the day at 43.54/55, lower than Friday's close at 43.51/52.

Forwards market: The 12-month premium closed at 1.32 per cent (1.32 per cent) and the six-month premium at 1.50 per cent (1.48 per cent).

G-Secs: The 7.55 five-year 2010-benchmark paper ended trade at Rs103.35/40 (6.72 per cent YTM) against the previous close of Rs103.14. The most active 7.27 per cent eight-year 2013 paper closed at Rs101.38 (7.04 per cent), up from Friday's close of Rs101.07 (7.09 per cent YTM). Yields on the 7.38 per cent 10-year benchmark eased from Friday's level of 7.21 per cent to 7.14 per cent on Monday.

The cut-off price on the 10.25 per cent 16-year 2021 paper was Rs122 (7.8 per cent), higher than the market expectations of Rs121.50.

Call rates: The inter bank rates opened at 5-5.1 per cent and closed at 4.75 per cent (5-5.10 per cent).

CBLO market: 225 trades, in the 4.65-5.00 per cent range, amounting to Rs 9,671.85 crore, were realised.
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16 year 2021 Govt. paper oversubscribed
Mumbai: The auction of the 10.25-Government stock 2021 was oversubscribed on Monday.

Dealers said that the cut-off price at Rs122 was higher than market expectation, which was Rs121.50. Prices of securities rose by 30 paise to Rs1.50 during the day as a result of this.

The notified amount for the paper was Rs5,000 crore. The Reserve Bank of India received 408 competitive bids amounting to Rs12,914.25 crore. The cut-off price was Rs122 (7.78 per cent YTM). The RBI accepted 31 bids, amounting to Rs4,977.85 crore.

The partial allotment percentage amounted to 90.55 per cent from 8 bids. The amount of underwriting accepted from primary dealers was Rs3,900 crore.

The weighted average price was Rs122.14. The RBI also received 27 non-competitive bids, amounting to Rs22.15 crore.
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PNB receives RBI clearance for life insurance venture
New Delhi: The RBI has given the Punjab National Bank (PNB) its go-ahead for its proposed foray into the life insurance business. The new company would aim to be a niche player with a predominant focus on the group life insurance segment.

The life venture would be floated jointly with the Principal Financial Group, US, and Bangalore-based Vijaya Bank. There is also a possibility that Berger Paints might participate in the equity of the life insurance company. The company is to be christened the Principal PNB Life Insurance Co.

PNB officials said that the new company would soon be moving the Insurance Regulatory and Development Authority (IRDA) for the final approvals before taking a plunge into the market.

The life company is expected to commence business with a paid up capital of Rs110 crore, a shade above the minimum capital requirement of Rs100 crore. PNB would be holding 30 per cent equity in the company, which is the maximum permitted for banks entering the insurance sector, while the remaining shareholding would be split between Principal Financial, Vijaya Bank and Berger Paints.

PNB already has ongoing ventures with Principal Group, Vijaya Bank and Berger Paints. The existing ventures where the three entities partner each other in varying degrees are the Principal PNB Asset Management Co, Principal PNB Insurance Broking and Principal PNB Financial Planner (for distribution of mutual funds).
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Crisil launches bank loan ratings
Mumbai: In line with global practice, CRISIL has now launched bank loan ratings, which will be the first such initiative in the country. Crisil has termed it an initiative to serve the interests of debt market participants.

The ratings can be at the behest of the borrower or the lender and could lead to the eventual off-take of bank credit. In addition to commenting on the timely payment of principal and interest, the rating will give an opinion on the extent of recoverability of the loan post-default, by capturing the impact of covenants, security and other repayment protection provided specifically to lenders.

R. Ravimohan, Managing Director and CEO, Crisil, said, "We expect the bank loan ratings to provide a uniform benchmark for credit and pricing decisions in the bank loan market. Loan ratings focus on both the risk of default, and the likelihood of ultimate recovery in the event of default."

According to Ms Roopa Kudva, Executive Director and Chief Rating Officer, Crisil, the ratings will support Indian banks in the implementation of the Basel II Accord, by providing an independent opinion on loan-specific risk.
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