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Rupee sheds seven paise - securities range-bound
Mumbai: The rupee closed lower at 43.51/52 against the dollar on Thursday, against its Wednesday closing at 43.44.

Forwards market: Premiums were range-bound, with the 12-month premium closing at 0.92 per cent (1 per cent) and 6-month closing at 0.92 per cent (1.03 per cent).

G-Secs: The bond market traded in a range, gaining about 5 paise towards the end of trade, following Bank of England's cut in repo rate.

The 7.55 per cent 5-year 2010 paper closed at Rs103.95 (6.57 per cent YTM), almost unchanged from Wednesday's level of Rs103.90/95 (6.58 per cent YTM). The 7.27 per cent 8-year 2013 paper closed at Rs102.57 (6.85 per cent YTM), down from earlier level of Rs102.47/50 (6.87 per cent YTM). The 7.38 per cent 10-year 2015 benchmark paper was dealt at Rs102.90/95 (6.97 per cent YTM) against the earlier level of Rs102.45 (7.03 per cent YTM).

Call rates: The inter bank rates closed at 4.75-5 per cent levels.
Reverse repo auction: The RBI received and accepted 56 bids amounting to Rs45,880 crore.

CBLO market: 281 trades were put through in the range of 4.85-5 per cent, for Rs10,944.70 crore.
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Increased representation for Govt. nominees on bank boards
New Delhi: The Union Cabinet has decided to introduce an amendment to the Banking Companies Act with a view to increasing the number of Government nominees on bank boards.

The move would enable the Government to have representation on boards proportionate to its majority holding in public sector banks.

The Bill would also enable the Government to set up a financial restructuring authority for potentially weak banks.
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RBI: Appropriate rating agencies needed for rating micro-finance bodies
Hyderabad: In the backdrop of the Government's decision to enable MFIs have access to various funds, the Reserve Bank of India (RBI) favours introduction of a system for rating micro-finance institutions (MFIs) by credible rating agencies across the country.

The Finance Minister had, in the Budget, announced redesigning the Micro Finance Development Fund (MFDF) as `Micro Finance Development and Equity Fund' (MFDEF) with an increased corpus of Rs200 crore.

According to the RBI Deputy Governor, V. Leeladhar, the MFIs would now have access to the fund to meet their equity requirements. Steps were under way to operationalise the fund.

Further, NGOs engaged in micro-finance activities were permitted to raise external commercial borrowings (ECBs) up to $5 million during a financial year for permitted end-use under Automatic Route.

"Access to various funds, of course, brings in the issue of rating. The rating of the MFIs by credible rating agencies would make the banks comfortable in dealing with them. There is thus an urgent need to have appropriate rating agencies," Leeladhar said.

Though RBI, being a formal regulator, is not interested in tightening its grip on the informal sector of micro-finance, it is keen on ensuring that the savings of the poor were safe since savings also form a part of the services offered by the microfinance providers.

According to Leeladhar, the success of the self-help groups in raising their corpus through thrift is the underlying trust that each member of the group has in other members.

Most of the poor would be first time savers and it needed to be ensured that their interests are protected.
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RBI asks banks to verify balances in currency chests
Mumbai: The RBI through a notification has said that there has been a rise in the instances of shortages in the remittances sent by currency chests of banks to Reserve Bank of India. The bank has said that this is so because banks fail to verify the balances periodically.

As per RBI guidelines, the balances in currency chest should be verified at least once in two months.

As the internal quantitative or qualitative checks exercised in the currency chests are insufficient it contributes to increasing incidents of shortages and misappropriation, the notification has said. RBI has, therefore, instructed all banks to issue necessary instructions to the Controlling Offices.
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RBI: Simplify account-opening norms in flood-hit areas
Mumbai: The Reserve Bank of India has instructed banks to observe minimum formalities for opening accounts for flood-affected persons, in a press release issued on Thursday has said.

The bank may open the account if another account-holder introduces the person, or if the person produces documents such as voters' identity cards, driving licence, identity cards issued by a company, school, or college, along with a document indicating address like electricity bill or ration card, or if two neighbours of the affected person produce these documents or any other evidence to the bank's satisfaction.

The RBI has issued this instruction because the Maharashtra State Government is arranging to issue cheques ranging from Rs50,000 to Rs2 lakh to affected persons, who may or may not have bank accounts and, therefore, would need to open accounts quickly, the release added.
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Dena Bank offers life cover for account holders
Mumbai: With the launch of its Dena Jeevan Savings Bank Account scheme, Dena Bank is offering life insurance cover to savings deposit account holders under a group scheme of the LIC.

A press release here said the customers opting for the scheme are eligible for life insurance cover of Rs1 lakh under one-year renewable term insurance plan at a nominal cost. Under the scheme, the customers only have to give a declaration of good health. There is no need for medical tests.

Insurance cover commences on signing the consent- cum-authorisation letter and after the premium is debited to the account.
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Chidambaram asks for settlement of insurance claims below Rs.50,000 by Aug. 31
New Delhi: The finance minister, P. Chidambaram, has directed the chairmen and managing director of the four public sector general insurance companies to ensure that claims below Rs50,000, arising out of the recent flooding in Mumbai and other parts of Maharashtra, should be settled by August 31.

The situation arising of the earlier floods in Gujarat was also reviewed.

In a meeting here on Thursday with the chiefs of the insurance companies, Chidambaram also said that efforts should be made to clear maximum number of claims expeditiously. Insurers informed that around 11,000 claims have been lodged with them amounting to Rs1,400 crore.

Out of these, 3,558 relate to `Miscellaneous' policies (householders and shopkeepers) and 2,619 to Motor Own Damage and the rest to Fire and Marine.

Chidambaram directed that claims up to Rs 50,000 in Gujarat as well should be settled by August 31.
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