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Rupee closes weak at Rs.43.84
Mumbai: The rupee closed weaker at Rs43.84 against its previous close of Rs43.82 to the dollar.

G-Secs: The widely traded 10.25%, 2021 paper closed weak at Rs126.24 against its previous close of Rs126.47.

Call rates: The inter bank rates were at 4.95-5.05 per cent.
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RBI: Oil prices may affect economy
Mumbai: The Reserve Bank of India has cautioned that high oil prices, even at the current level, could have an impact on the Indian economy.

"We are happy that inflation expectations have been brought down to around three per cent from the eight per cent last year," said Rakesh Mohan, Deputy Governor, RBI.

He said RBI's assessment on inflation made during the review of annual policy has not changed on account of increase in international crude oil prices. "Our expectations during the review were made after taking into account the increase in international crude oil prices and pass through of it to the domestic market," he stated.

Mohan said RBI would keep sharpening its instruments to keep the inflation low.

Low inflation would also keep down the interest rates which was needed for the competitiveness of Indian economy globally, he said, adding that RBI was not making any change in its inflation outlook made in the review of annual policy but was keeping eye on the global developments.
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PM asks for action on Vaidyanathan panel recommendations
New Delhi: Prime minister Manmohan Singh has asked the Centre as well as the States to implement the Vaidyanathan Committee report, which has suggested far-reaching reforms, as well as a Rs14,839 crore financial package, for the revamping of rural cooperative credit institutions.

"Let me first thank Prof. Vaidyanathan and his colleagues for their good work. They have produced a useful report and it is now up to the Centre and State governments to act on it," Prime Minister, Manmohan Singh said, addressing State ministers here.

The panel has recommended a financial assistance of Rs14,839 crore for revamping the cooperatives.

The panel has proposed that the Centre should contribute 53 per cent of the package, the States 31 per cent and the cooperatives themselves to provide 16 per cent of the amount.

All cooperatives need to maintain a capital to risk weighted assets ratio (CRAR) of a minimum seven per cent initially and would have to increase it to 12 per cent in five years time, as they work in small areas, mainly in agriculture.

The task force has recommended assistance under revival package and soft loans for helping cooperatives attain seven per cent CRAR and for subsequent CRAR by raising internal resources of the cooperatives.

The panel has also sought retirement of state government share capital in cooperatives due to their interference in the functioning of these institutions.
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RBI issues guidelines on debt restructuring for SMEs
Mumbai: The Reserve Bank of India (RBI) has issued detailed guidelines on the debt restructuring mechanism for small and medium enterprises (SMEs) with out-standings of up to Rs10 crore.

RBI said banks could decide the acceptable viability benchmark, consistent with the unit becoming viable in seven years and the repayment period for restructured debt not exceeding 10 years.

Accounts classified by banks as "loss assets" would not be eligible for restructuring.

The Central bank said additional finance would be treated as a 'standard asset' in all accounts up to a period of one year after the date when first payment of interest or of principal, whichever is earlier, was due.

The RBI will issue guidelines for funded and non-funded outstandings of above Rs10 crore separately. It has asked banks to formulate a debt-restructuring scheme for SMEs.
While framing the scheme, banks must ensure that the scheme is simple to comprehend and includes parameters indicated in the guidelines.

The RBI said every restructuring would follow a receipt of a request to that effect from the borrowing units and every restructuring package must be implemented within a maximum period of 60 days from date of receipt of requests.

Each bank will have to display on its website the debt restructuring scheme for SMEs and also forward it to SIDBI for placing on their web site. Banks will also have to disclose in their published annual balance sheets, under 'Notes on Accounts', information in respect of restructurings undertaken during the year for SME accounts.
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Max New York to double business in three years
Chennai: Private insurance major, Max New York Life (MNYL), hopes to double its business within the next three years, its managing director and CEO Gary R Bennett, said on Friday.

The company, during the last four-and-a-half years, has sold more than six lakh policies with the total sum assured to the tune of Rs18,300 crore, through its 54 offices in 35 cities across the country. The company's capital base had crossed Rs500 crore, he said.

He said the total premium income has grown from Rs87.70 crpre in 2002-03, to Rs203.40 crore in 2003-04 and Rs396 crore in 2004-05.

In 2004-05 the company had signed seven 'bancassurance' alliances and over the coming months, there could be more such tie-ups. The company was also looking at opening branch offices in South.
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