RBI probes diversion of funds
Mumbai: As a precautionary measure, the Reserve Bank of India has initiated inquiries to check whether funds from either the money markets or the cooperative banks have made their way to fund the capital market. This follows the payment crises on stock exchanges as a result of collapse in share prices.

According to RBI norms, banks are restricted from using money market borrowings – typically overnight borrowings – from being used to fund longer-term assets. It is understood that the RBI has sought details of money market borrowings from foreign banks and the purpose of these borrowings.

The inclusion of co-operative banks in the inquiry follows the near collapse of the Madhavpura Co-operative Bank, which saw a guarantee, allegedly given by it without adequate collateral to a broker, being invoked.

The run on Madhavpura Bank resulted in the panic spreading to other cooperative banks in Gujarat. According to industry sources, a circular addressed to all scheduled primary urban cooperative banks has sought information on various activities of each bank between March 1 and March 17.

The RBI has also sought specific details on wherever advances have been granted against shares to stockbrokers, corporates or individuals.
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Mobile services operators to be affected by limited mobility
New Delhi: According to a study carried out by IDC, mobile phone services companies are most likely to feel the heat from the limited mobility of basic telephone service provider. These providers will use the wireless in local loop and it is expected that at leats 57 per cent of the subscribers, especially in metro circles, are expected to shift to the new technology.

The greatest attraction for subscribers using the WiLL technology is the rate. A user can make calls within a radius of 40 km at the rate of Rs 1.20 for a three minute call and free incoming calls. However the report also clarified that most subscribers said that clarity of voice, rather than mere price, was the important deciding factor.
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As March sales stagnate, carmakers plan price hike
New Delhi: Despite the fact that the month of March is traditionally a good time for automobile companies in this country, this year the month has seen very stagnant sales. This year, in fact, the auto majors expected demand to be better in light of the budget concessions granted to the industry, which prompted the carmakers to mark down on sticker prices.

Almost all major carmakers have reported flat sales till now in the month.

But despite this scenario, some car companies like Ford India are said to be contemplating a price hike to counter the cost fluctuations due to currency deprecation.
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Citibank unveils Internet banking for the SME sector
Mumbai: CitiBusiness Direct, a comprehensive Internet banking solution, currently being offered to Citibank’s large local corporate clients, is now being extended to the small and medium enterprises sector. CitiBusiness is fast becoming one of Citibank’s greatest focus areas, accounting for nearly 15 per cent of the bank’s corporate business.

According to Mr. Sujit Banerji, head of corporate banking in the country, the SME segment is one of the fastest growing segments in the Indian economy and this product is the bank’s attempt to provide this dynamic group with the utmost service to stay competitive and profitable.

In India, the bank already counts about 5,000 SMEs among its cleintele. Citibank refers to the SME segment as emerging local corporates (ELCs).

With just a computer and Internet access, customers can use CitiBusiness Direct to access accounts from anywhere in the world and get a consolidated view across all CitiBusiness products that the customer uses.
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Cell majors appeal to FIs to cut lending rates
Mumbai: Pursuant to the recent cut in lending rates by leading financial institutions, IDBI and ICICI, cellular operators in the country are planning to approach the institutions to bring down the cost of their debt. The operators include the Birla-Tata-AT&T union, Fascel and BPL.

According to the operators this is a necessity to improve bottomline as they have already faced with high debt taken in the past two-three years. Over a period of time, mobile firms have invested funds of Rs 13,000 crore. A section of the mobile firms currently pay about 14-15 per cent interest. The high-cost debt has forced cellular operators to remain in the red.

According to analysts a reduction in the rates would lead to increased viability of some of the mobile operators, who otherwise would have to face closure.
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RBI suspends Madhavpura Bank from clearing house
Ahmedabad: Even as Mr. S Ramachandran, retired general manager of Bank of Baroda, took over charge as administrator of Madhavpura Mercantile Cooperative Bank (MMCB) here today, the Reserve Bank of India (RBI) has extended the suspension of the beleagured bank from the clearing house till further notice.

The troubled bank has now started to function in accordance with the directives of the RBI. As per the instructions given by the apex bank, account holders of MMCB can withdraw only up to a maximum of Rs. 1,000 for every current and savings account they hold. Fixed deposit holders whose deposits have matured also are entitled to this amount for withdrawal.

As per the RBI’s original suspension order, the clearing of MMCB instruments should have resumed from March 20. The indefinite extension of this order has put several instrument holders of this bank in trouble.
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ICICI personal finance portfolio soars
Mumbai: Thanks to a very aggressive and innovative marketing techniques, ICICI has seen its personal finance portfolio zoom from a mere Rs. 700 crore last year to Rs. 4,000 crore this year. The financial institution's personal finance portfolio comprises of two-wheeler, car and consumer durables finance, home-loans and credit-cards.

The fastest growing segment in this portfolio has been automobile loans which has generated business worth Rs. 1,500 crore this year. Ms. Chanda Kochar, senior general manager of ICICI, attributes aggressive geographical roll-out thus increasing the number of locations as a main reason for the growth. ICICI is now present in 65 locations, up from the 22 last fiscal.

ICICI has not only increased the number of agents to do business for its car finance and home loans, but has also combined innovative deals with manufacturers.
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