Rupee at 3-month high - securities range-bound
Mumbai: The rupee strengthened against the dollar on Thursday to close at a three-month high at 43.40/41, stronger than Wednesday's close of 43.48.

G-Secs: The 8.07 per cent, 12-year-2017 security, which is currently the active paper, touched Rs104.85 in intra-day trade and ended atRs 104.70, marginally down from Wednesday's close of Rs104.77 (7.45 per cent YTM).

The 7.55 per cent 5-year, 2010 security ended at Rs102.75 (6.89 per cent). The 7.38 per cent 10-year benchmark finished trade at Rs101.07 (7.23 per cent YTM) against Wednesday's close of Rs101.15 (7.22 per cent YTM).

Call rates: Trade were conducted between 5-5.05 per cent (5 per cent).

CBLO market: 171 trades amounting to Rs5967.05 crore in the rate range of 4.80-5 per cent were realised.
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RBI raises cap on bank dividend payout
Mumbai: The Reserve Bank of India has raised the ceiling on bank dividend payout ratio to 40 per cent from 33.33 per cent, subject to fulfillment of stringent norms for capital adequacy and non-performing assets.

Now the banks would not require prior approval of the central bank for payment of dividend within the new norms.

"It has been decided to grant general permission to banks to declare dividends. The new guidelines would be applicable to the dividends declared for the accounting year ended March 31, 2005 onwards," the RBI said in a notification today.

In case any bank violates the above guidelines, it would be viewed very seriously and would attract penal action under Section 46 of the Banking Regulation Act, 1949, it said.

The dividend payout ratio would be calculated as a percentage of dividend payable in a year, excluding dividend tax, to net profit during the year, it added.
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Cabinet approval for revision of SLR and CRR limits of commercial banks
New Delhi: The government has approved two bills which will enable the Reserve Bank of India to revise SLR and CRR limits of commercial banks.

The Cabinet has also cleared the Credit Information Companies (Regulation) Bill to help banks cut non-performing assets.

"The Cabinet approved amendments in three bills - Reserve Bank of India Act of 1934, Banking Regulation Act of 1949 and Credit Information Companies (regulation) bill of 2004," Information and Broadcasting Minister Jaipal Reddy said after the meeting.

The bills would be introduced in the current session of Parliament, he said.

The amendments in the BR Act and RBI Act will give operational flexibility to RBI for revising the limits on the Statutory Liquidity Ratio and Cash Reserve Ratio of commercial banks, which will release more funds for productive purposes. At present, the two acts restrict the SLR to a minimum 25 per cent of bank deposits and CRR to 3 per cent.

The bill also provides for voting rights to investors in banks according to their shareholding, which would encourage FDI in banks.

The amendment in BR Act would enable RBI to classify securities issued by centre, states and other entities as "approved securities". It will also enable banks to issue preference shares. RBI will also be empowered to grant exemption to any bank to grant loans and advances to any company.

The amendment will also give RBI the powers to inspect the financial statements or business affairs of associate entities of banks. RBI will also be able to supersede the board of a bank after the amendment.
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RBI: Floating rate bond coupon at 5.66 pc
Mumbai: The Reserve Bank of India has fixed the rate of interest on the Floating Rate Bond, 2016 (FRB, 2016) at 5.66 per cent. The period of the bond is from May 7, 2005 to May 6, 2006.

In a press release, the RBI has said that the variable base rate for payment of interest will be the average rate of the implicit yields at cut-off prices in the three auctions of the 364-day Treasury Bills, immediately preceding the relative annual coupon reset date.

According to the release, the variable base rate works out to be 5.62 per cent. The mark-up decided in the auction held on May 6 was +00.4. The coupon rate has been fixed accordingly, it added.
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Banking Results: UCO Bank
UCO Bank net down twenty per cent - mulls public issue
Kolkata: The UCO Bank is considering a public issue of equities, which may be scheduled for sometime in the second half of the current fiscal. Bank officials have indicated that the exact size and timing of the issue will be finalised after the bank has restructured its capital.

The restructuring of the capital had become necessary in view of its large size, Rs799 crore, and negligible reserves, entailing low EPS and therefore low market price of the bank's share. Most likely the bank may opt for the preference share route, wherein a portion of the equity would be converted into preference shares. This would reduce the size of the equity, which in turn would boost the share price creating a favourable situation for a public issue.

UCO Bank had launched its first public issue (IPO) in September 2003, offering an Rs10 share at a premium of Rs2 each, totalling Rs240 crore.

As for the bank's performance in 2004-05, the net profit is at Rs346 crore (Rs435 crore in 2003-04) lower by more than 20 per cent mainly due to 45 per cent drop in treasury profit at Rs192 crore (Rs351 crore) and higher provisioning (29.95 per cent) at Rs473 crore (Rs364 crore).

However, in terms of all other parameters, the performance was much better than that in 2003-04. Thus net interest income at Rs1,406 crore (Rs1,195 crore) showed a growth of 17.66 per cent and non-treasury income at Rs324 crore (Rs274 crore) a growth of 18.24 per cent. The gross NPA ratio dropped to 4.96 per cent (6.93 per cent) and net NPA ratio to 2.93 per cent (3.65 per cent).

Total deposits at Rs49,470 crore (Rs39,244 crore) showed a growth of more than 26 per cent and total advances at Rs28,234 crore (Rs21,343 crore) showed a growth of more than 32 per cent.
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