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Rupee weakens - securities down
Mumbai: The rupee further weakened against the dollar on Monday ending at 43.5450/55, weaker than Friday's close of 43.50.

Forwards market: The 12-month was at 1.01 per cent (0.97) and the 6-month was at 0.93 per cent (0.89).

G-Secs: The 7.27 per cent-8-year-2013 paper, which is currently active, closed at Rs101.18 (7.08 per cent YTM), slightly lower than Friday's Rs101.20/22 (7.07 per cent). The 7.37-9 year-2014 paper closed at Rs101.48 (7.14 per cent YTM). The 7.38-10 year-2015 benchmark paper was dealt at Rs101.65 (7.15 per cent YTM).

Call rates: The inter bank rates were at 5.05 per cent (3-4 per cent).

CBLO market: 213 trades, put through in the 4.95-5.25 per cent range and amounting to Rs8,869.70 crore, were realised.
Reverse repo auction: The RBI received and accepted 24 bids amounting to Rs11,495 crore.
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RBI quarterly economic review: Upbeat on growth
Mumbai: In the first ever quarterly review of macro-economic and monetary developments of the economy, an upbeat Reserve Bank of India (RBI) has projected economic growth in the range of 6-7.2 per cent during the current fiscal but has warned that inflationary pressure on the economy is still on.

According to the bank, lead indicators point to robust services sector performance in Q1, 2005-06. ''The generally positive developments in agriculture, industry and services coupled with upbeat business confidence have imparted optimism regarding growth prospects for 2005-06,'' said RBI in its first-ever quarterly review of the Indian economy.

The central bank will announce its monetary policy on Tuesday.

The central bank has confirmed its advance estimates of real GDP growth for the year 2004-05 at 6.9 per cent on the back of positive developments in the agriculture, industry and services sectors.

Taking note of the positive developments in the real economy, RBI said the cumulative rainfall recorded during June 1 to July 13, 2005, was 1 per cent above normal as against 10 per cent below normal a year ago.

Industrial production was buoyant and broad-based in April-May, 2005 with growth accelerating in the manufacturing sector.

Inflationary pressures, RBI pointed out, continue to persist as reflected in the average inflation rate at 6.3 per cent on July 2, 2005 as against 5.3 per cent a year ago.

Consumer price inflation rose to 5 per cent in April 2005, from 4.2 per cent in March 2005 on the back of costlier fruits, vegetables, food grains and pulses. But it declined to 3.7 per cent in May 2005, reflecting a price fall in goods like wheat and kerosene.
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Finance ministry: No tax on inter-bank transactions
New Delhi: The Government has decided to exempt inter-bank transactions from the levy of banking cash transaction tax.

All scheduled banks have been advised not to collect banking cash transaction tax on such transactions.

A circular to this effect has been issued, a release issued by the Finance Ministry said on Monday.
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SBI eyes four foreign banks for acquisition
Kolkata: State Bank of India is evaluating four banks abroad for acquisition. The bank is looking to expand its foreign operations in a bid to become one of the top three banks in Asia by 2008 and among the top 20 globally over the next few years.

"We are evaluating four international banks currently and I cannot divulge any further information on this," SBI managing director T S Bhattacharya said on the sidelines of the banking conclave organised by FICCI. These are mid-size banks with low manpower. SBI expects to complete the due diligence over the next three months and thereafter the negotiations would commence.

The bank has already taken over two overseas banks in Indonesia and Mauritius, Bhattacharya informed. The bank has set a target to double its global assets in the next two years. Besides acquisition attempts, the bank is simultaneously moving ahead to strengthen its foreign network and is all set to open new branches in Angola and Shanghai.
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Exim Bank to pick up 2.5 per cent stake in Bombay Rayon
Mumbai: The Export-Import Bank of India (Exim Bank) has said it plans to make its first ever investment in the equity of a domestic Indian company by buying shares worth Rs5 crore in Bombay Rayon Fashions Ltd (BRFL).

The bank will subscribe to 10,000 equity shares of Rs10 each at a premium of Rs40 per share, picking up a stake of about 2.5 per cent in BRFL.

S Sridhar, executive director of Exim Bank, said that in the post-MFA (Multi Fibre Arrangement) or post-quota scenario the bank felt the need to protect and facilitate the growth of export-oriented small and medium enterprises (SME).

"By investing in equity, we hope to capture the upside by garnering more revenue and also have closer interaction with such companies," he said.

Sridhar also said that the bank would seriously look at a few other SMEs in terms of direct investment. At Rs4,000 crore, SMEs are 30 per cent of the total number of recipients of debt from Exim Bank.
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Banking results: Bank of Rajasthan, Union Bank, Vijaya Bank

Bank of Rajasthan Q1 net dips
The Bank of Rajasthan has reported a dip in net profit to Rs5.22 crore for the quarter ended June 30, from Rs20.15 crore in the corresponding quarter last year, according to a press release from the bank.

The release quoted Pravin Kumar Tayal, chairman, Bank of Rajasthan as saying, "A provision of Rs4.42 crore towards employees wage liability and depreciation of Rs12 crore on Government Securities has impacted earnings."

The bank has also decided to transfer majority of its Government Securities under Available-For-Sale (AFS) to Held-Till- Maturity (HTM) category, to restrict further losses in treasury portfolio, the release said.

Total income decreased marginally to Rs155.08 crore (Rs155.43 crore). Other income dropped to Rs19.66 crore (Rs25.36 crore).

Net interest income moved up to Rs51.56 crore (Rs45.26 crore). Total advances rose to Rs26.10 crore (Rs21.18 crore). Net NPAs have decreased to 2.62 per cent (2.98 per cent). Cost of deposits has fallen to 4.57 per cent (4.84 per cent).

The Capital Adequacy Ratio is 13.72 per cent (12.81 per cent).

Union Bank Q1 net up 14 per cent
The Union Bank of India has reported a net profit of Rs240.39 crore for the quarter ended June 30, 2005, an increase of 14.25 per cent from Rs210.40 crore in the corresponding quarter last year.

The growth in profit is on account of an increase in interest on advances, said Cherian Varghese, chairman and managing director, Union Bank.

The total income for the first quarter was Rs1,491.45 crore (Rs1,400.65 crore). Net interest income was Rs534.72 crore (Rs466.67 crore). Other income decreased to Rs133.69 crore (Rs234.82 crore) on account of a fall in profit on sale of investments, which fell to Rs22.57 crore (Rs118.27 crore), Varghese said.

The ratio of net non-performing assets (NPAs) to net advances stood at 2.39 per cent (2.38 per cent).

Varghese said that last year, the floating provision was deducted from the gross NPAs, but this year, the floating provision of Rs328 crore has been used for Tier-I capital as per RBI guidelines.

Total deposits increased to Rs63,158 crore (Rs53,199 crore) and advances grew to Rs41,615 crore (Rs32,459 crore). Retail loans grew to Rs8,623 crore (Rs6,590 crore) and home loans rose to Rs3,242 crore (Rs2,272 crore).

The capital adequacy ratio (CAR) was at 12 per cent (12.39 per cent) on account of growth in credit.

The bank has also got approval from the board to raise Tier-II capital worth Rs800 crore, which will be done in two tranches, Varghese said. The bank also has headroom of 10 per cent to reduce the government stake from the current level of 60.85 per cent.

"We are likely to dilute around nine crore equity shares, but not at one go. At least half of this could be offered to the public this year," Varghese said. Without raising additional capital, the bank's CAR would be 10.75 per cent, which is a comfortable level.

Vijaya Bank Q1 net down 72 per cent
Vijaya Bank has reported a net profit of Rs27.56 crore for the first quarter ended June, a 71.74 per cent dip from Rs97.6 crore in the corresponding previous period.

During the quarter, it clocked operating profits of Rs202.32 crore. The focus during 2005-06 would be on lending to the agricultural and SME sectors to the extent of 30 per cent and increased financing to SHGs, along with increased investment in technology upgradation, according to the bank.

Total income improved over 7.7 per cent to Rs657.78 crore during the quarter from Rs610.5 crore earlier.

Net interest income improved to Rs237.21 crore (Rs233.72 crore) while interest income from advances stood at Rs314.09 crore (Rs271.90 crore).

Gross NPAs were at Rs413.11 crore (Rs417.15 crore) and the gross NPA ratio was 2.94 per cent (3.57 per cent). Net NPAs amounted to Rs133.66 crore and the net NPA ratio to 0.97 per cent.

The bank's total business was Rs39,029 crore against Rs33,251 crore earlier.

Total deposits grew 15.94 per cent to Rs25,001 crore while gross advances stood at Rs14,028 crore, a 20 per cent rise over the corresponding previous period.
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