Money market: Rupee weaker - G-secs flat
Mumbai: The rupee closed weaker on sustained dollar buying by the public sector banks, finishing the day at 43.80/81 levels, about five paise weaker than Wednesday's closing levels of 43.75.

Forwards market: The six-month forward closed at 1.69 per cent (1.70 per cent) and the 12-month at 1.46 per cent (1.45 per cent).

G-Secs: The benchmark 7.38 per cent paper closed at 6.51 per cent as against its previous finish of 6.53 per cent.

Call rate: market closed flat at 4.70-4.75 per cent levels.

CBLO market: 138 trades aggregating Rs 4,379.70 crore was put through in the rate range of 3-4.8 per cent.
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Indian holdings of US gilts down to $12.9 bn
Bangalore: Indian institutions and the Reserve Bank of India have reduced their holdings of US Treasury bonds by $600 million in December 2004 in anticipation of hikes in Federal interest rates.

According to data released by the US Treasury Department, Indian holdings of US treasuries have come down to $12.9 billion. The year-on-year dip, from December 2004 to December 2003, was $3.8 billion. The holdings are still higher than the December 2002 level of $9.2 billion.

Other institutions holding foreign government securities include the General Insurance Corporation of India and foreign branches/subsidiaries of domestic public sector banks.

The reduction in the holdings do not reflect any slowdown in inflows to the country as the inflows co0ntinue to average at least $100 - 150 million per day, the bulk of it being portfolio flows from foreign institutional investors, overseas corporate bodies and non-resident Indians.

Demand for foreign currency has increased in view of the up tick in oil prices. The foreign exchange reserves, which stood at about $130 billion in December '04, has since then dropped to slightly below $129 billion despite the dollar's weakening.
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SBI to raise Rs4,000 crore subordinate debt
New Delhi: The State Bank of India has said it would raise Rs3,000-4,000 crore subordinate debt in the next financial year and is also looking at acquisitions in Africa, Asia besides at home.

SBI's associate banks have already raised Rs 600-800 crore subordinate debt. The bank has said that credit growth this year has been exceptionally high at 26 per cent from January 2004 to January 2005, and accordingly more capital would be needed because of this growth.

The bank was also examining proposals for acquisition of small-to-medium sized banks in Africa, Asia and India and hoped to finalise more deals during the next financial year.

On non-performing assets, which stood at 2.53 per cent during the last financial year, it said that the bank may be able to reach around 2.3 per cent during the present financial year, and hoped to reach two per cent by 2005-06.
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BoI to raise $1 billion through notes programme
Mumbai: The Bank of India has obtained board approval to raise $1 billion through a medium-term notes programme and is expected to borrow its first tranche by April this year. The funds will be used to further the bank's global expansion plans, officials said.

BoI also recently raised Rs300 crore through a Tier-II issue. The tenor of the bonds was 111 months while the coupon was 7.1 per cent. The proceeds would be used to augment the bank's capital base, said an official.
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Karnataka Bank raises domestic term deposit rates
Mangalore: The Karnataka Bank Ltd has announced an upward revision of domestic term deposit rates with effect from February 21, on fresh deposits and renewals of maturing ones.

A bank release said here that senior citizens would get one per cent more on their fixed deposit and Abhyudaya Cash Certificate deposit of one year and above maturity periods.
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Financial Tech to pick up majority stake in IBS Forex
Mumbai: Financial Technologies (India) Ltd has informed the BSE that it is considering acquiring a controlling stake in IBS Forex Pvt Ltd, which runs FX DIRECT, a currency trading platform for interbank foreign exchange trading.

The company's board is to meet tomorrow to consider this proposal.

The board will also consider a proposal to raise funds for financing the company's expansion and diversification plans through issue of equity shares on preferential basis to foreign institutional investors as per SEBI guidelines.
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United India and Canara Bank in bancassurance pact
Bangalore: Public sector non-life insurer United India Insurance Co Ltd (UIICL) has tied up with Canara Bank as part of its bancassurance arrangement. The arrangement would allow UIICL to dispense its products through all Canara Bank branches. It would also allow customers to pay their premiums directly through the bank for policy renewals. The arrangement is also intended to expand the rural reach of UIICL.

UIICL has so far tied up with 37 banks. UIICL's business target for the year is Rs3,000 crore, of which bancassurance alone is expected to contribute about Rs300 crore.

Canara Bank would earn at least Rs2 crore by way of commissions from its bancassurance. For the next year, the bank hopes to earn Rs16 crore from its bancassurance arrangements in both non-life and life.

Till January-end, the bank had achieved a business of Rs1,51,000 crore.
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Kidwai: Banks may require FDI for Basel II needs
Mumbai: Banks in India may explore Foreign Direct Investment route to raise funds for meeting the Basel-II norms, Ms Naina Lal Kidwai, Deputy Chief Executive Officer, HSBC Ltd has said.

Speaking at the annual public lecture organised by the A.D. Shroff Memorial Trust, here on Thursday, Ms Kidwai said Indian banks would require around Rs9,000-12,000 crore to be compliant with these norms. She said banks could also raise funds from the domestic capital market through IPOs.

Referring to the emerging banking scenario, she said the banking sector was poised for big changes aided by factors such as technological changes, consolidation and rise in capital infusion.
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