Rupee ends lower
Mumbai: The rupee closed weaker on Wednesday, ending at 43.8150/8350 per dollar, 0.06 percent weaker than Tuesday's 43.80/81. Traders said the falling shares were dragging the rupee down, with concerns about a rise in global crude prices also weighing on the currency. Oil is India's biggest import. The annualised premium on the six-month dollar ended 8 basis points higher at 2.09 percent.
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Reddy moots capping FII inflows
Mumbai: Dr. Y.V. Reddy, Governor, Reserve Bank of India, today called upon the Government to have an option to impose a ceiling on FII inflows or even taxing them. However, he later clarified that the RBI was not in favour of imposing such a ceiling at this stage and that the effectiveness of taxes was arguable.

Observing that the magnitude of FDI/FII flows are tending to be large and volatility has perhaps increased, Dr Reddy said, "A view needs to be taken on the quantity and quality of FII flows. While quotas or ceilings, as practiced by certain countries, may not be desirable at this stage, there is merit in our keeping such an option open and exercising it selectively as needed, after due notice to the FIIs."

He said price-based measures such as taxes could be examined though their effectiveness is arguable.

Dr Reddy was speaking at the release of the India Development Report of Indira Gandhi Institute of Development Research.
Nearly sixty per cent of the reserve accretion in the current financial year has come in two months (November and December 2004) perhaps indicative of the volatility in portfolio flows.
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Chidambaram: `No plan to tax inflows'
New Delhi: The Union Finance Minister, P. Chidambaram, on Wednesday said that there was no proposal to tax foreign institutional inflows, setting at rest fears over such a possibility in the wake of the comments made by the Reserve Bank of India Governor, Dr Y.V. Reddy.

"I am quite clear in my mind that there is no question of taxing FII inflows. There is no proposal to tax FII inflows," Chidambaram said reacting to Dr Reddy's comments in Mumbai on Wednesday.

The RBI Governor had expressed concern over volatility in domestic stock markets due to FIIs' investments and said a view of price-based action like taxes could be considered.

The RBI Governor's comments led to fears that the Government may tax FIIs in the ensuing Budget. The FIIs are understood to have been net sellers on Wednesday. The Sensex was down by 120 points on Wednesday to close at 6,102.74 points.

The Finance Minister said the idea of taxing FII inflows had come up from time-to-time. "I rejected it earlier. I reject it now," he added.
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TMB to launch RTGS facility
Madurai: The Tamil Nadu Mercantile Bank (TMB) is launching `any bank/branch' money transfer facility for customers under `Real Time Gross Settlement System (RTGS)' from January 14. In a statement the bank said, the customer can make remittances from a selected TMB branch to another bank's branch located across the country within two hours and at a cheaper cost and high safety.

Forty-five major branches of the bank have been enabled to facilitate the transaction.

One can send/receive payments across the country provided the sending bank as well as the receiving bank are members of RTGS and the particular branch has IFSC code, the bank added.
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RBI: C-D ratio of banks at 59.9 per cent
Mumbai: The credit-deposit (C-D) ratio of scheduled commercial banks as on last Friday of September 2004 stood at 59.9 per cent, according to the Reserve Bank of India's Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks - September 2004. The CD ratio indicates the extent of investment of bank deposits by way of credit.

The highest C-D ratio was observed in Chandigarh (93.4 per cent), followed by Tamil Nadu (91.3 per cent) and Maharashtra (86.1 per cent).

At the bank group level, the C-D ratio was above the all-India ratio in respect of foreign banks (90.8 per cent) and other scheduled commercial banks (69.2 per cent), and was lower for State Bank of India and its associates (59.0 per cent), nationalised banks (55.1 per cent) and regional rural banks (50.4 per cent).

As regards gross bank credit, nationalised banks held the maximum share of 46.3 per cent of the total bank credit followed by State Bank of India and its associates at 24.2 per cent and other Scheduled Commercial Banks at 19.5 per cent. Foreign banks and regional rural banks had relatively lower shares in the total gross bank credit at 7.0 per cent and 3.0 per cent, respectively.
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