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Rupee slips further - bonds bearish
Mumbai: The Rupee slipped further against the dollar closing the day at 45.23/24. On Wednesday, it had closed at 45.16. Dealers said that most Asian currencies were under pressure against the dollar. Dealers also said there was some RBI intervention in the market, with PSU banks selling dollars.

Forwards: In the forward market, the 12-month premium ended at 0.47 (0.49) and the 6-month at 0.5 per cent (0.54).

Bonds: Prices opened lower but moved up slightly during the day. Dealers said that sentiment in the bond market was bearish and there was no buying support. Volumes were thin at Rs750 crore.

G-Secs: The 10.25-16 year-2021 closed at Rs124.97 (7.51 per cent YTM), almost the same level as Wednesday's Rs124.98 (7.51 per cent YTM). The 7.37-9 year-2014 paper closed at Rs101.91 (7.06 per cent YTM), lower than Wednesday's close at Rs101.95 (7.06 per cent YTM).

Call rates: The call rate closed at 5-5.05 per cent.

Reverse Repo: In the one day reverse repo, under the liquidity adjustment facility, RBI received and accepted 31 bids amounting to Rs17,220 crore in the one-day reverse repo auction.

CBLO: In the CBLO market, there were 252 trades for Rs13,562.70 crore in the rate range of 4.94-5.10 per cent.
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SBI signs pact with Crisil
Mumbai: The State Bank of India and Crisil have entered into a memorandum of understanding under which the latter will assign ratings to small-scale industries (SSIs) that are borrowers of SBI.

These ratings will be carried out under the NSIC-Crisil performance and credit rating scheme for SSIs.

The rating will be an additional input for SBI to determine interest rates, margins and collateral requirements for SSI borrowers.
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Reverse Repo rate hike likely
Bangalore: Bankers says there will be a 0.25 and 0.5 percentage point hike in reverse repo rates when the Reserve Bank of India announces its peak season Credit Policy next week, paving the way for higher interest rates in the economy.

Reverse repo is the sale of securities by the government with an agreement to buy back at a predetermined period and price. The RBI uses this method to mop up surplus liquidity in the markets.

The RBI's direct lending rate to banks, the Bank Rate, may also be hiked. In addition liquidity support is also provided through repurchase operations, purchase of Government securities from the banks. Currently, the reverse repurchase rate is 5 per cent and the Bank Rate is 6 per cent.
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LIC to grow income from properties
Mumbai: The Life Insurance Corporation of India has decided to develop its real estate portfolio, targeting a growth of 40 per cent in its net income.

Around 70 per cent of LIC's properties are in the commercial segment and its income from real estate has been growing. The gross income from real estate for 2004-05 was Rs130 crore and the net income, excluding expenses, was Rs90 crore.

However this accounts for just three per cent of LIC's total income.

LIC has set a target 25 per cent growth in gross income and 40 per cent rise in the net income for this fiscal.

The company has 1,577 properties, of which, eight are in countries outside India such as Mauritius and Fiji. The book value of LIC's assets stands at Rs1,139 crore.

The company plans to develop 72 of its properties worth Rs1,000 crore into commercial and residential complexes.

(Also see: Interview: Y N Rammurthy, ED, engineering, LIC)
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Foreign banks seek leeway on rural branches
Mumbai: Foreign banks have asked the Reserve Bank of India (RBI) to keep their expansion to tier-II and tier-III towns outside the purview of the World Trade Organisation (WTO) obligations.

Recently in a branch licensing draft circular, the RBI had said a greater weightage should be given to the nature and scope of banking facilities provided by banks to common people, particularly in tier-II and tier-III towns.

In response to this the foreign banks have said that the RBI should not consider foreign banks opening branches in such towns as within the WTO commitment. These semi-urban and rural areas will also help the foreign banks to meet their priority sector obligations, banking sources said.

As per WTO obligations, foreign banks are given only those many branch licences in a financial year, as the concerned bank's parent regulator will allow for an Indian bank in that country.

Foreign banks need to meet the priority sector lending norms in India, which comprises 32 per cent of the net bank credit. Although there are alternatives like contract farming, the banks have said that they find it difficult to meet the priority sector stipulations due to lack of physical footprint.

Most multinational banks are looking at India as a potential growth market. Hence, they want to spread their tentacles by rolling out more branches in newer cities/towns and penetrate further in existing cities/towns.
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Indian Bank plans to enter insurance broking
Hyderabad: Indian Bank plans to foray into insurance broking and transit from a company agent to a customer agent profile.

The bank now sells insurance products and its board has recently given an `in principle' nod for the foray. The bank now intends to approach the Insurance Regulatory Development Authority (IRDA), for the required clearance.

The bank has recently put in place a Centralised Appraisal System (CAS) in Chennai and has also engaged Wipro to implement Six Sigma for best practices in the bank.

To optimally use manpower, the Indian Institute of Management, Ahmedabad, has been mandated to detail a human resource management (HRM) strategy. The report would be ready by the end of 2005.
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