ICICI Bank raises interest rates by 25 to 75 bps
Mumbai: ICICI Bank, India's second-largest commercial bank has announced that it is increasing interest rates on its loans and deposits by between 25 and 75 basis points.

The floating reference rate (FRR) for ICICI Bank, used for determining the rate of interest for adjustable (floating) rate home loans, has been increased by 50 bps. The bank's interest rates on fixed rate home loans have been increased by 75 bps to 8.5 per cent from the current level of 7.75 per cent with immediate effect.

The increase in FRR will be applicable to new customers from November 17, 2004. For existing customers, the increase in FRR by 50 bps will be effective from January 1, 2005, in line with the bank's policy of resetting rates on a quarterly basis.

The existing fixed rate home loan customers will not be impacted by this increase and their contracted rates will remain unchanged, ICICI Bank said in a statement.

Financial markets have been waiting for interest rate increases by banks since the RBI raised its benchmark short-term repo rate by 25 basis points to 4.75 per cent at a mid-year review of monetary policy in October.

Rivals Housing Development Finance Corporation (HDFC) and State Bank of India are also expected to follow the ICICI Bank hike with their own, though the extent of the hikes are yet to be finalised.
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Govt considering merger of PSU general insurance cos
New Dehi: The ministry of finance is now said to be considering the consolidation of the four public sector non-life insurance companies.

The options for restructuring the state-owned companies are being thrashed out by the ministry with the General Insurance Public Sector Association, a body representing the managements of the four insurance companies. The government-owned non-life insurance companies are Oriental Insurance, New India Assurance, National Insurance and United India Insurance, having headquarters in New Delhi, Mumbai, Kolkata and Chennai respectively.

The options under consideration range between merging all four companies into a single new entity creating the non-life version of the Life Insurance Corporation (LIC) or to have two mergers, thereby reducing the number of companies from four to two.
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IBA offers 12.5 percent hike in pay to bank employees
New Delhi: The Indian Banks' Association (IBA) has offered a hike of 12.5 per cent on the basic salary of bank employees to resolve the mess caused by the employees' demand for a major wage hike.

Earlier, the association offered a hike of 11.5 per cent, which the bank unions rejected.

An increase of 12.5 per cent would mean an additional outflow of between Rs150 and Rs350 crore for the public sector banks, (PSBs) depending on the size of the workforce. The hit could obviously be of a larger denomination for banks like State Bank of India and Punjab National Bank.

According to a senior trade union member, the unions had demanded a 20 per cent hike in wages.
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