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Rupee weakens - securities higher
Mumbai: The rupee marginally weakened against the dollar on Thursday ending the day at 43.53, down from Wednesday's close at 43.51.

Forwards market: The 12-month premium closed at 1.32 per cent (1.35 per cent) and the 6-month premium ended at 1.48 per cent (1.51 per cent).

G-Secs: The 7.55 10-year 2010 paper closed at Rs103.19/23, up from Wednesday's level of Rs103.15 (6.77 per cent YTM). The 7.27 8-year 2013 paper ended trade at Rs100.88/93 (7.12 per cent YTM), higher than the earlier close of Rs100.70/75 (7.1450 per cent YTM).

Call rates: The inter bank rates closed between 4.95 per cent and 5.5 per cent (4.95 per cent).

CBLO market: 204 trades, put through in the 5.10-5.15 per cent range and amounting to Rs7,481.75 crore, were realised.
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RBI Governor says global uncertainties have increased
Chennai: The Governor of the Reserve Bank of India, Dr Y.V. Reddy, has said that global uncertainties "have increased compared to what we estimated." According to the Governor, the RBI was "analysing, still looking into it" and that the central bank hoped to come out with an update on the economy soon.

Asked for the RBI's outlook on the economy, Dr Reddy said a formal response would come in the monetary policy statement. "Till the monetary policy review is made we will stick to the basic projections," he said.

Speaking informally to journalists here at the end of a meeting of the Central board of directors of the RBI to review the performance of the Indian economy during the first three months, Dr Reddy observed that the financial markets in the country were "by and large stable."
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IRDA tightens norms for group insurance and corporate agents
New Delhi: In a bid to check unfair practices by insurers and intermediaries to capture more business, insurance regulator IRDA has issued new norms for group insurance schemes and corporate agents.

In separate guidelines, IRDA has rationalised the approach that an insurer needs to adopt for Group Insurance policies. IRDA has said that a "group" should consist of persons who assemble together with a commonality of purpose or engaging in a common economic activity like employees of a company.

"No group should be formed with the main purpose of availing insurance...A person negotiating group insurance rates and then going around finding members to insure will not be considered as a legitimate group," it said.

However, other groups like welfare society, credit card holders, borrowers of a bank and professional associations may be treated as a group provided the organiser has an authority from majority of the members to arrange the insurance cover.

IRDA has also barred insurers from offering insurance cover to a member, who leaves the group. Similarly entry into the group insurance scheme for an individual will be permitted from a well-defined date.

Insurers have been asked to sell group insurance schemes strictly either directly, or through an agent, and not through a person who does not have a licence.
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PSBs seek conversion of investment fluctuation reserve to Tier-I capital
Bangalore: Public sector banks have again approached the Reserve Bank of India for conversion of their investment fluctuation reserve to Tier I capital. Bankers said this was necessary since all banks were expected to shift to the operational risk and market risk guidelines prescribed under the Basel II guidelines.

Currently, only IFR (investment fluctuation reserve) in excess of the 5 per cent of the investment portfolio is treated as Tier 1 capital. IFR is a below-the-line item and is a charge on net profit. Bankers had raised the issue of treating the IFR as part of Tier I in the past also, though the RBI turned down the proposal since it was created as a revaluation reserve.

But bankers said that the IFR, however, was now becoming redundant. One reason for the IFR's redundancy was the fact that most banks have completed de-risking of their investment portfolios - the HFT (held-for-trading) and AFS (available-for-sale) categories. Derisking implied that banks had shrunk the average maturities of both AFS and HFT to under two years.

Bankers said that once Basel II operational risk and market risk guidelines become effective, even HTM securities would come within its purview. Consequently, bankers said, that if the present trend in yields continued, they would be required to make large capital allocations for even HTM securities, which currently comprised about 25 per cent of the demand and time liabilities.

Bankers said that it was this fear that was preventing bankers from becoming active in the debt markets, with most banks just selling their securities and bringing them down to the barest statutory requirement ahead of the new norms.
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United Bank and Bajaj Allianz tie up for accident cover
Kolkata: United Bank of India has tied up with Bajaj Allianz General Insurance Co to offer deposit holders coverage against accidental death or permanent total disability. The cover would be available to both the existing and new customers, a note issued by the bank has mentioned.

A person who already has a deposit with the bank or a new customer who opens a deposit account may pay Rs13 per year for coverage of Rs1 lakh against accidental death and Rs1.25 lakh for permanent total disability.

The cost per month for the coverage is Rs1.08, UBI has stated, adding that its customers will have the option of opening multiple deposit accounts, each of which will be covered separately. This will increase the quantum of insurance compensation.

A person who, for instance, has a SB, CD and term deposit accounts with UBI and pays Rs39 (that is, Rs13 x 3 for the three accounts) will get coverage of Rs3 lakh or Rs3.75 lakh as the case may be. The entry age is up to 80 years for a customer, the note has stated.

The scheme will be known as United Suraksha Yojana.
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UCO Bank to reduce interest for Crisil rated SSI units
Calcutta: Uco Bank may cut its interest rates if borrowers in the SSI sector carry out a credit rating through Crisil. Currently the bank charges 10 per cent from the sector.

The Uco Bank has signed a memorandum of understanding with Crisil, which will assign ratings to the bank's borrowers in the SSI sector.

"We will recalibrate the interest for SSIs who go for the rating exercise," chairman and managing director of Uco Bank, V. Sridar said.

These ratings will be carried out under NSIC - Crisil's performance and credit rating scheme for small-scale industries. Crisil is also offering a discount on its standard fee structure.

For SSIs with a turnover of Rs50 lakh, Crisil will charge Rs7,450 instead of Rs19,080; for units with a turnover between Rs50 lakh and Rs2 crore, the charges will be Rs9,918 instead of Rs19,590. For above Rs2 crore, the charge will be Rs13,224 instead of Rs26,120.

"The SSI sector can use this rating to build its credibility with the bank and also with customers, suppliers and collaborators. Rated SSIs will find it easier to obtain funds from the bank at appropriate terms. The rating report prepared by Crisil can be used as a self-improvement tool too," said Roopa Kudva, executive director and chief rating officer.

Uco Bank has kept a target of Rs2,800 crore for SSI lending against Rs1,953 crore in the previous year.
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UTI Bank net up 31 per cent
Mumbai: The UTI Bank has posted a 31 per cent growth in its net profit at Rs92.63 crore in the first quarter of the current financial year.

In the same period, the bank's net non-performing assets have risen a tad to 1.19% (1.16.%) and its capital adequacy ratio (CAR) has gone up to 11.74% from 11.11% as on June 30, 2004.

However, the bank undertook adequate provisioning which aggregated to 72% of gross NPAs.

UTI Bank's total income has grown 44% to Rs771.85 crore in the reporting quarter from Rs537.63 crore as on June 30, 2004. Other income of the bank has also shown an impressive year-on-year growth of 36% at Rs150.01 crore.
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HDFC Bank net up 31 per cent
Mumbai: Riding on strong growth in non-consumer loans and fee-based income, HDFC Bank's net profit jumped 31% to Rs183.53 crore for the quarter-ended June 30.

For the reporting quarter, the bank's total income rose 43% at Rs1,157.68 crore from Rs810.59 crore in the previous financial year. A 144% increase in other income to Rs263.55 crore in the reporting quarter (Rs108.04 crore) was driven principally by fees and commission, which accrued to Rs215.2 crore in the reporting quarter.

The net interest income, which is interest earned less interest expended, for April-June grew 31% at Rs524 crore.
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