Rupee sheds gains - G-Secs in range
Mumbai: On Thursday, the rupee ended trade at 43.37 against the dollar, lower than Wednesday's close of 43.28/29.

G-Secs: In the bond market, prices moved in a narrow range of 10 paise. The 7.38 10-year 2015-benchmark paper opened at Rs101.30/35 (7.18 per cent YTM) and closed at Rs101.20/25 (7.20 per cent YTM) against Wednesday's close of Rs101.30/35. The 7.55 five-year 2010 paper, which is the most actively traded paper, ended unchanged at Rs102.95 (6.84 per cent YTM) against Wednesday's close of Rs102.95/97 (6.84 per cent YTM). The 8.07 12-year 2017 paper ended at Rs105.02, as against Wednesday's close of Rs104.97.

Call rates: The inter bank rates were between 4.95 per cent and 5 per cent (4.95-5.05 per cent).

CBLO market: 157 trades amounting to Rs5650.95 crore in the rate range of 4.90 to 5.25 per cent were realised.
Back to News Review index page  

RBI: Fresh guidelines on amalgamation of banks and NBFC mergers
Mumbai: The Reserve Bank of India has stipulated that merger of banks should have the consent of two-third majority of the members of their boards and not just those present at the board meeting alone and further that these directors should be signatories to the Deeds of Covenants of the merger. These stipulations have come from the RBI by way of fresh guidelines on the amalgamation of banks and merger of NBFCs.

Two-third majority of the shareholders of each bank should approve the draft scheme for merger, after necessary clearances by their board of directors.

According to the RBI, bank boards have a crucial role to play in the process of merger. Therefore, the board needs to consider the values at which the assets, liabilities and the reserves of the amalgamated entity are proposed to be incorporated into the books of the merged entity and whether due diligence exercise has been carried out, it said.

The RBI has also stipulated that the board should consider the impact of merger on the profitability and the capital adequacy ratio of the amalgamating bank. Once the central bank approves a merger, a shareholder dissenting that merger is entitled to claim the value of his shares from the banking company in which he hold shares. The RBI will have the final say in the value of the shares to be paid to the dissenting member.

On the merger of non-banking finance company (NBFC) with a bank, the RBI said the banking company should obtain the central bank's nod after the board's approval of the merger proposal but before the scheme is submitted to the High Court for approval.

While granting approval to the scheme, the bank board should examine whether the NBFC has violated or may violate any RBI and SEBI norms and ensure that these norms are complied with before the amalgamation is approved.
Back to News Review index page  

New India offers floater mediclaim policy
Mumbai: New India Assurance, as part of a bancassurance tie-up with United Western Bank (UWB), has launched a bank specific floater group mediclaim policy known as New Uniwest Mediclaim policy, a product which will be available to the family unit - a maximum of four members constituting self, spouse and two dependent children.

The premium will be chargeable on the basis of the age of the seniormost member of the family. Floater group policy implies that the insured need not specify separate sum insured for each of the family members.

New India Assurance officials said that as on March 31 2005, they had received Rs90 crore as premium income from bancassurance agreements. UWB has bancassurance agreements with seven other banks.

New India Assurance had reported a premium income of Rs5,100 crore for the fiscal 2004-05, of which the gross domestic premium accounted for Rs4,423 crore. Premium from mediclaim insurance touched Rs473 crore.
Back to News Review index page  

Overseas investment ceiling for companies to be double of net worth
Mumbai: The Reserve Bank of India has announced that the ceiling of overseas investment for Indian companies has been raised from 100 per cent of their net worth to 200 per cent, according to a press release from the RBI.

Under the automatic route for overseas investment, eligible Indian entities were permitted to invest in overseas joint ventures and in wholly owned subsidiaries up to 100 per cent of their net worth.

In the monetary policy of 2005/2006, RBI had liberalised this to allow companies to invest up to 200 per cent of their net worth.

This was done with a view to promoting Indian investment abroad and to enable Indian companies to reap the benefits of globalisation. The ceiling though, is not applicable to the investments made out of balances held in EEFC accounts and out of the proceeds of ADR / GDR issue.

Authorised dealer banks may allow remittances under the automatic route up to 200 per cent of the net worth as on the date of the last audited balance sheet of the investing companies.
Back to News Review index page  

Yes Bank launches retail initiative with debit card
Mumbai: The Yes Bank has announced its foray into retail banking with the launch of its International Gold and Silver debit card in partnership with MasterCard International.

Yes Bank officials have indicated that a date for the bank's IPO could be fixed only after approval from the Securities and Exchange Board of India.

In March 2005, the Yes Bank had filed its Red Herring Prospectus with SEBI, to enter the capital market with a public issue of 7-crore equity shares, to raise around Rs350 crore.

The Gold card is the first debit card in India to offer zero per cent surcharge on petrol bills at any petrol pump. Both Silver and Gold cards have access to 11,000 ATMs across the country and are accepted across over one lakh Point of Sale terminals.

About the other retail plans, officials said that the bank has tied-up with Max New York Life for life insurance and plans to tie-up with another private insurance company for general insurance. Internet banking facilities for corporate as well as retail customers are also in the offing.

Currently the bank has four branches, two each in Mumbai and Delhi. It plans to open five more in Mumbai, Chennai, Gurgaon, Hyderabad and Ahmedabad.
Back to News Review index page  

Indian Bank to launch IPO in first half of the year
Chennai: The Indian Bank has plans to tap the capital market in the current year sometime in the first half of the current year. Though the size and form of the issue was yet to be decided, bank officials have indicated that the issue will command a significant premium as its performance places it among the top banks in the country.

It is yet to decide whether it would tap the domestic or international markets or both. Currently, the bank's equity base is about Rs737 crore and earnings per share at about Rs6, officials said.

For the year ended March 31, 2005, the Indian Bank reported a net profit of Rs408.49 crore on a gross business of Rs53,689 crore. In 2003-04, the net profit was Rs405.75 crore on gross business of Rs45,379 crore.

Operating profit went up by 19 per cent to Rs958.07 crore (Rs802.46 crore) and business has grown by 18 per cent. Net interest income grew by 17 per cent to Rs1,303.65 crore (Rs1,117.06 crore); total deposits were up 14 per cent at Rs34,808 crore (Rs30,444 crore); and net advances went up by 30 per cent to Rs18,380 crore (Rs14,126 crore).

Gross non-performing assets (NPA) have dropped to 3.96 per cent (7.98 per cent) and net NPAs to 1.35 per cent (2.71 per cent). This was significant recovery for a bank that reported a gross NPA of close to 40 per cent and net NPA of 26 per cent in 1997, officials said.

Total agriculture credit was Rs2,641.92 crore (Rs1,379 crore).
The Indian Bank has been adopting core-banking solution and plans to expand it to 500 branches by December and to 1,000 by March 2006. At present, 12 branches in five metros have introduced core banking solutions.
Back to News Review index page