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Rupee dips - gilts decline
Mumbai: The rupee edged down against the dollar on Thursday ending trade at 43.5305/54, lower than Wednesday's close of 43.4950.

Forwards market: The 12-month premium closed at 1.21 per cent (1.23 per cent) and the 6-month premium ended at 1.29 per cent (1.2 per cent).

G-Secs: In the bond market, prices fell 30-80 paise on profit booking. The 8.07-12 year-2017 paper closed at Rs109.05 (6.92 per cent YTM). The 7.38-10 year-2015 paper was dealt at Rs104.05 (6.82 per cent YTM) down from Wednesday's Rs109.80 (6.83 per cent YTM).

Call rate: The inter bank rates were called at 5 per cent (5-5.10 per cent).

CBLO market: 127 trades, aggregating Rs4,199.00 crore in the rate range of 4.92 to 5.00 were realised.
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SBI to merge with seven associates in two years
Mumbai: State Bank of India will merge itself with seven associate banks in two years, according to SBI chairman A K Purwar.

The SBI chairman also said that the bank will finalise acquisitions in Asia and Africa in coming two months.

Purwar said the SBI expects interest rates to remain stable in the near term while in the medium term, global factors like crude prices will affect interest rates. Purwar also said that inflationary pressure was easing in the economy and a GDP growth of 7 per cent was possible even without a good monsoon.
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RBI to introduce cheque truncation system
Bangalore: The Reserve Bank of India will introduce a cheque truncation system in the country in order to accelerate clearing operations.

RBI officials have said that the system would be initially taken up as a pilot project in NCR before being extended to the rest of the country. The new facility will enable cheque clearance on a T+0 basis. This implies that the customers' outstation cheques will be cleared on the same day it is deposited and the accounts settled.

RBI also proposed to hive off its clearing operations, once the Indian Banks Association-promoted company for electronic clearing operations became operational. Once this is done, bank officials said, the RBI's role will be confined to being a pure regulator.

Currently, RTGS allowed for T+0 settlement. So far, about 5,000 bank branches were linked by the RTGS.
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RBI announces State loan auctions
Mumbai: The Reserve Bank of India has announced that 11 State Governments would raise loans amounting to Rs2,481.15 crore, by selling 10-year State Development Loans, through a yield-based auction using multiple price auction method.

The States that will raise the loans are Arunachal Pradesh, Andhra Pradesh, Assam, Bihar, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Manipur, Tamil Nadu and West Bangal, said the RBI press release. Of these, Andhra Pradesh, West Bengal and Mahrashtra will raise over Rs400 crore each.

The auction will be held on June 14. Bids should be submitted by 12.00 noon. Successful bidders will have to make payments by June 15.
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FCI bond issue oversubscribed more than three times
New Delhi: The Food Corporation of India has received a subscription of Rs3,530 crore for the third private placement issue of FCI bonds against the target size of Rs976.50 crore.

The issue has been over-subscribed by more than 3.5 times. The corporation has decided to retain the entire Rs976.50 crore under the five-year tenure at a cut-off coupon rate of 7.18 per cent.
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Centurion Bank to sell ICICI Lombard's products
Mumbai: Centurion Bank and ICICI Lombard have entered into a bancassurance agreement under which Centurion Bank will distribute personal and business covers through its branches, direct sales teams and marketing offices across India.

Centurion Bank will also offer customised general insurance solutions to its corporate banking customers. Centurion Bank already has a tie-up with Bajaj Allianz for the distribution of life insurance products.

The bank plans to double the number of branches from the current 99 and extend its geographical penetration from 58 to 75 locations. For the rural areas, the bank plans to use the `hub and spoke' model and will set up around 1,500 dealer showrooms.

The bank will look for inorganic growth, only if it adds to shareholder value, officials said. According to them, the bank will use 50 per cent of the over Rs300 crore raised through GDRs towards organic growth.

The bank also aims to expand its retail business by 65 per cent by focusing on retail, small and medium-term enterprises.

For ICICI Lombard, this will be the third bancassurance tie-up after ICICI Bank and ABN Amro. Bancassurance accounts for 25 per cent of the company's premium income.

ICICI Lombard also plans to introduce a health insurance product that covers pre-existing diseases with defined sub-limits. Health insurance is a growing line of business, he said.
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