RBI to permit banks to issue long-term bonds
Mumbai: To enable commercial banks to raise long-term funds, the Reserve Bank of India proposes to permit them, as in the case of financial institutions (FIs), to issue long-term bonds, which would not be part of the subordinated debt. This significant move will enable banks to finance long-term projects, particularly in housing and infrastructure sectors. RBI had earlier allowed ICICI Bank Ltd to issue long-term bonds, but this was an exception following the request from the bank after the term lending financial institution —ICICI —was merged with it.
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Forwards fall; bond prices crash
Mumbai: Following the announcement of the cuts in the Bank rate and the Cash Reserve Ratio in the Credit Policy, the forward premia fell by 15-20 basis points in the money markets on Tuesday. The six-month premium closed at 2.00 per cent (2.15 per cent) and the one-year premium closed at 2.25 per cent (2.45 per cent). Though there was downward movement of premia, R V S Sridhar, Vice President & Chief Dealer, Money & Forex, UTI Bank, said "It is not likely to fall much more since the overnight repo rate was untouched by the Governor.''
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RBI drops Bank Rate — Jalan prescription looks at growth
Mumbai: IN a firm resolve to flag off growth, the Reserve Bank of India today dropped Bank Rate to 6 per cent from 6.25 per cent. Further changes in Bank Rate are ruled out till October. The Cash Reserve Ratio has also been cut to 4.50 per cent, effective fortnight beginning June 14 to release around Rs 3,000 crore. Repo rates have been left unchanged at 5 per cent. Addressing presspersons here on Tuesday, the RBI Governor, Dr Bimal Jalan, reiterated RBI's soft interest rate bias to achieve a 6 per cent GDP growth for the current year with an inflation rate of 5-5.5 per cent.
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State Bank places order for 1,500 ATMs with NCR
Mumbai: The State Bank of India (SBI) and NCR Corporation have inked a pact for the supply of 1,500 automated teller machines (ATMs) in the country. These ATMs will be supplied to SBI over the next 18 months, and with this deployment, SBI will have the largest network of over 3,000 ATMs. The contract, signed in Mumbai on April 19 encompasses hardware, site installation services and ATM Network Management Services.
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Lead banks may lower rates
Mumbai:Banks are expected to drop lending and deposit rates in response to the cut in Bank Rate from 6.25 per cent to 6 per cent. Unlike last time when the RBI cut the Bank Rate in October 2002, banks are now more inclined to follow the central bank's signal. If indications from leading banks such as State Bank of India, Bank of Baroda and Corporation Bank were anything to go by, most banks would be resorting to a cut in PLR and deposit rates shortly.
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Govt drops plan to convert IFCI into commercial bank
New Delhi: The reluctance of Reserve Bank of India (RBI) to further clutter the banking sector has forced the Government to decide against converting IFCI Ltd into a commercial bank. The possibility of turning the financial institution into a bank had come up for discussions as part of its restructuring plans. "We have decided that IFCI will not be converted into a bank," top officials of the Ministry of Finance said. The decision, which runs against the tide of similar conversions of development financial institutions (DFI) taking place in recent times, could soon result in IFCI surviving as the lone all-India term-lending institution on the financial horizon.
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RBI sees benign inflation ahead
Mumbai: The outlook for inflation in 2003-04 is expected to remain benign even as the annual rate of inflation, measured by point-to-point changes in the wholesale price index (WPI), edged up to 6.2 per cent by end-March 2003 with the hardening of international oil prices. “International crude prices have started easing and upside risks for domestic inflation are waning. A downward revision in domestic petroleum product prices with effect from April 16, is expected to enable a further decline in inflation. Information on the spread and intensity of rainfall needs to be juxtaposed with initial forecasts of the monsoon in the approaching season to obtain reliable gauge of the impact on prices of primary articles,” the Reserve Bank of India (RBI) said in its report on Macroeconomic and Monetary Developments in 2002-03.
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Debt-GDP ratio of centre to rise to 64.9 per cent in ’03-04 s
Mumbai: The debt-GDP ratio of the centre is budgeted to rise to 64.9 per cent by the end of fiscal 2003-04 as against 63.3 per cent in revised estimates for 2002-03 and net market borrowings are budgeted lower at Rs 1,07,194 crore for 2003-04 than Rs 1,12,865 crore in the revised estimate for the last fiscal. The combined debt-GDP ratio of the centre and states is estimated to have risen to 75.3 per cent in 2002-03 and the weighted average maturity of government securities is lower at 13.8 per cent as compared to 14.3 per cent in the previous year. The weighted average coupon rate is down to 7.34 per cent from 9.44 per cent in the preceding year
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World Bank warns of fraud schemes
Washington: The World Bank said it had become aware of an increasing number of “advance fee fraud schemes” misusing the name of the international organisation. “In several of these schemes, individuals have falsely represented themselves to be ‘world bank auditors’ or members of the ‘world bank West African regional delegation’ and have sent faxes to creditors of several West African governments, claiming to be empowered by these governments to repay the government’s past debts,” the bank said in a statement on Monday
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Forex norms eased to spur investment
Mumbai: The Reserve Bank of India in its Statement on Monetary and Credit Policy 2003-04 has announced a slew of relaxations relating to foreign exchange regulations leading to capital account convertibility. The measures are aimed at encourage overseas investments and further widen hedging possibilities for NRIs and overseas investors. Addressing mediapersons here, the RBI Governor, Dr Bimal Jalan, said, "We are open to taking more such transaction and investment-oriented measures towards capital account convertibility going forward as we have done today.''
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AIBOC to hold rally in Mangalore
Mangalore: The Dakshina Kannada unit of the All-India Bank Officers' Confederation (AIBOC) has decided to hold a demonstration on April 30 in front of the Circle Office of Canara Bank in Mangalore in connection with the strike call given by AIBOC and other unions, according to a press release. AIBOC and other trade unions have called for a strike on May 2 demanding among other things early settlement of the wage dispute in the banking sector, offering of a second option for pension and various other demands.
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IBA's stiff stand to blame for strike move'
Chennai: The intransigent attitude of the Indian Bank's Association is what led the bank unions to call for a strike on May 2, senior union leaders said on Tuesday. At a press conference here, the General Secretary of the All India Bank Officers Confederation (AIBOC), Shantha Raju, pointed out that the average wage hike in the last three wage pacts was about 17 per cent. But in the current wage negotiations, in response to the unions' demand for 35 per cent increase, IBA came up with a counteroffer of just 4 per cent.
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