Special securities given to RBI converted into dated paper
New Delhi: The Indian finance ministry has converted the entire stock of non-transferable 'special securities' issued to the Reserve Bank of India in lieu of the outstanding ad hoc Treasury Bills into regular marketable, dated Government of India (GoI) securities. "We have only recently converted the balance Rs 41,818 crore worth of special securities into dated stock, which will considerably bolster the RBI's sterilisation armoury," a top ministry official was quoted as saying.

The RBI's original holdings of special securities aggregating Rs 71,000 crore were issued in the course of 'funding' operations during the 1980s and early 1990s. These involved conversion of 91-day ad hoc and tap Treasury Bills into non-transferable securities, bearing a fixed 4.6 per cent annual interest in perpetuity. In addition, another Rs 50,818 crore of all outstanding ad hocs were similarly funded during 1996-97, simultaneous to the government's decision to discontinue fresh issue of such bills to the RBI in order to curb automatic monetisation of its fiscal deficit.
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PNB Housing, HUDCO may cut interest rates
New Delhi: PNB Housing and HUDCO are planning to further lower their interest rates on home loans by about .25 per cent by January 2004. Earlier there were talks that the rates of interest may go up after having hit the rock bottom. PNB Housing managing director V K Sood said the existing liquidity conditions and intense competition in the market will force most players to carry on with their low interest rates. "The interest rates on housing loans will be further revised after the credit policy. The rates are likely to further dip after March." The interest rate being offered by the company at present is about 7.5 per cent on a floating option, while the average interest rates are between 7 and 8.5 per cent.

R P Singhal, HUDCO's chief of finance, said though there could be some pressure on long-term money due to the clamp on the external commercial borrowings (ECBs), interest rates on housing loans will continue to remain low due to intense competition. "Depending on the situation we may lower our interest rates further," he said. "To survive in the business, banks and HFCs will have to carry on offering low interest rates."
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LIC, GIC say no to HSBC's open offer
Mumbai: LIC, GIC and its subsidiaries with a combined stake holding of over 20.1 per cent in UTI Bank have said no to the open offer by HSBC for an additional 20-per cent in UTI Bank at Rs 90 a share. Both institutions have rejected the open offer of HSBC which has acquired the 14.71 per cent stake of CDC Capital Partners and South Asia Regional Fund. LIC holds 13.5 per cent in UTI Bank while GIC and its subsidiaries hold 7.6 per cent.

"The open offer at Rs 90 is no way acceptable to us. The price has to be substantially higher than the prevailing market price to consider any offloading of UTI shares," said senior officials at these institutions adding that the price will not enthuse the public to accept the HSBC offer. Both the players have evaluated UTI Bank of having high potential and worth retaining their investment even after the involvement of HSBC, a news report said.
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