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Rupee at a fresh low; securities decline
Mumbai: The rupee fell to a fresh low against thedollar ending the day at 45.90/91.

Bonds: In the bond market, prices fell by around 15-30 paise on account of tightening liquidity. The 7.37 per cent - 9 year-2014 paper opened at Rs102.48 (6.98 per cent YTM) and closed at Rs102.34 (7 per cent YTM), lower than Friday's Rs102.50 (6.97 per cent YTM). The 10.25 per cent -16 year-2021 paper opened at Rs125.51 (7.45 per cent YTM) and ended at Rs125.37 (7.46 per cent YTM), down from Friday's close at Rs125.53 (7.45 per cent YTM).

Reverse Repo: In the one-day reverse repo, under the LAF, RBI received and accepted 13 bids amounting to Rs6,190 crore.

Call Rate: The call rate closed at 5.60-5.80 per cent (six per cent).

CBLO: In the CBLO market, there were 303 trades for Rs11,248.65 crore in the rate range of 5.40-6 per cent.
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Aviva Life signs pact with 11 co-op banks
Mumbai: Aviva Life Insurance has entered into partnerships with eleven co-operative banks its for bancassurance business in Maharashtra, Gujarat, Rajasthan and Jammu & Kashmir.

Aviva Life Insurance managing director Stuart Purdy said the company seeks to expand distribution network across the country and increase penetration to 224 locations through these partnerships.

The eleven banks are Citizens' Cooperative Bank and Jammu Central Cooperative Bank in Jammu, Ganganagar Kendriya Sahakari Bank at Ganganagar in Rajasthan, Prime Cooperative Bank and Surat District Cooperative Bank in Surat, Rajkot Nagrik Sahakari Bank in Rajkot, Sabarkantha District Cooperative Bank (Sabarkantha) and four banks in Maharashtra which are the Krishna Sahakari Bank(Karad), Bhagyalakshmi Mahila Sahakari Bank(Nanded), Ichalkaranji Janata Sahakari Bank (Ichalkaranji) and Shree Warna Sahakari Bank.

Covering 400 branches at present, Aviva Life Insurance will be expanded to 1000 co-operative bank branches by the end of 2006 and has set its sales target at 6000 policies in 2006 according to Purdy.

Purdy said products like Anmol Suraksha (a traditional endowment product with guaranteed benefit, EasyLife Plus (a unit-linked endowment product), PensionPlus (a retirement solution), LifeBond 5 (unit-linked with limited premium payment term of 5 years) will be available to customers through the above mentioned banks.
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Indian, Pak banks cross borders
Mumbai: The central banks of India and Pakistan have signed an understanding that will allow Indian banks to open two branches in Pakistan and vice versa. The two countries had snapped banking ties after the 1965 war.

The Reserve Bank of India and the State Bank of Pakistan will mutually decide the banks that are to be allowed to open branches, keeping in view their respective regulatory policies and procedures, according to an RBI release.

A decision on opening additional branches of these banks will be taken by the RBI and the SBP in adherence to their respective policies and licensing norms applicable to foreign banks.

The banks that had branches in Pakistan are State Bank of India and Punjab National Bank (PNB), and may also get the regulatory nod to set up shop in Pakistan in the first round.
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SBI acquires Indonesian bank for US$6mn
Mumbai: State Bank of India (SBI) has acquired the Indonesian bank - PT Bank IndoMonex - for about $6 million, to foray into Indonesia and expand presence in the Asean region.

SBI has executed documents for acquiring 76 per cent of the paid-up capital along with the management control of PT Bank IndoMonex, which has a registered office in Jakarta. The acquisition of the Indonesian bank is subject to regulatory approvals and processes.

PT Bank IndoMonex is a closely held entity with seven offices located in Jakarta, Bandung and Surabaya. This is SBI's third overseas acquisition this year after Mauritius-based Indian Ocean International Bank and Kenyan Giro Commercial Bank.

Earlier this year, SBI had bought a 51 per cent stake in Mauritius-based Indian Ocean International Bank, having a network of 10 branches and 10 ATMs. It had acquired 76 per cent stake in closely held Giro Commercial Bank of Kenya for about $7 million. The bank founded by people of Indian origin has six branches in Nairobi and one each at Mombassa and Kisumu. Giro Bank has an asset base of $60 million, as on August 30, 2005, and is ranked 23rd among Kenyan banks in terms of assets size.

Assets of the SBI's foreign branches rose from $6,276.20 million as on March 31, 2004 to $9,114.03 million as on March 31, 2005. The customer credit rose to $5,536.85 million at the end of March 2005 from $3,657.85 million during the previous year.

Similarly, customer deposits increased to $3,257.24 million from $2,017.60 million from March 31, 2004.
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LKB plans an IPO as merger fails
Mumbai: With the merger between Lord Krishna Bank and Federal Bank, failing both banks plan to separately hit the growth trail independently.

Lord Krishna Bank has indicated that it would look at a public issue of between Rs200-300 crore, while Federal Bank said that it would keep the option of inorganic growth open and look at other acquisition targets.

The Delhi-based Puris hold a 60 per cent stake in Lord Krishna Bank and it was widely expected that their holdings would have come down to around 10 per cent after the merger.

The markets seemed to react positively to the merger being called off and the Federal Bank scrip went up 1.48 per cent on the BSE to Rs164.45.

Federal Bank, which posted a net profit Rs90.1 crore last year, announced in August plans to raise Rs450 crore through an issue of global depositary receipts.

Lord Krishna Bank posted a loss of Rs34 crore last year after taking a hit on security valuations due to rising interest rates. Its interest income was Rs195 crore and net NPAs were 4.12 per cent as of March 31, 2005.

Federal Bank, with about 400 branches concentrated in Kerala, was expected to increase its penetration across the country through the takeover since 55 of Lord Krishna's 112 branches are in the west and north.
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Bharath Nirman Fund being set up
A Bharath Nirman Fund is being set up with the signing of the joint memorandum by the core contributors.

The fund is being set up by six public sector banks - Canara Bank (contribution Rs15 crore), Allahabad Bank (Rs5 crore ), Corporation Bank (Rs5 crore), Indian Overseas Bank (Rs5 crore), Oriental Bank of Commerce (Rs10 crore) and Vijaya Bank (10 crore) along with Small Industries Development Bank of India (5 crore).

The fund has a corpus of Rs55 crore and its period of maturity is eight years.

The fund has been floated to promote entrepreneurship and provide an impetus to manufacturing and services sector in the country. It will also give preference to later stage investments in promising domestic companies and the targeted average size of investment is between Rs5 and Rs10 crore.

The focus of Bharath Nirman Fund will be emerging Indian businesses such as IT, telecom, biotechnology, engineering and pharmaceuticals.
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Exim Bank in deal with World Bank branch
Mumbai: The Export-Import (Exim) Bank of India has entered into a memorandum of co-operation with Multilateral Investment Guarantee Agency (MIGA) to promote overseas investment by Indian corporates.

MIGA is a private sector branch of the World Bank, aimed at promoting foreign direct investment (FDI) flows into developing countries.

Exim Bank would provide financial assistance and MIGA would look after the credit insurance needs. MIGA covers political risks such as currency transfer restriction and inconvertibility, expropriation, civil disturbance and breach of contract.

Exim Bank recently extended Rs35 crore financial assistance to two pharma companies for their respective acquisitions in global markets.

Asia falls in the category of lower risk premium due to a favourable perception among foreign investors.
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Banks' lending to infrastructure sector rises
Mumbai: Some major public sector banks have seen their infrastructure portfolios almost double in the second quarter of this fiscal. These include the State Bank of India, Corporation Bank, Union Bank of India, Bank of India and Bank of Baroda.

Bankers say lending to infrastructure is expected to increase in the rest of the fiscal, as most projects have long gestation periods and credit disbursal is done in stages. Some estimate a rise of at least 20 per cent from current levels.

The bank saw a 67.10 per cent rise in infrastructure lending at Rs4,532 crore against Rs2,712 crore last year.

State Bank of India's infrastructure portfolio increased five-fold in the second quarter compared to last year. It funded roads, hydel projects and captive power plants.

The size of the loans varied from Rs50-60 crore for the smaller road and hydel projects to Rs100-250 crore for the bigger road projects. Lending to this sector is likely to double from the current levels, said the official.

Bank of Baroda doubled its infrastructure lending from around Rs2,000 crore last year to over Rs 4,000 crore this year, said a senior official of the bank. (The major segments include power and ports.) Corporation Bank infrastructure portfolio rose to 8.74 per cent for the quarter ended September 2005 from 3-4 per cent last year.

Acording to RBI figures, overall infrastructure saw a growth of 5.1 per cent for the first five months of this fiscal.

As on August 19, 2005, the total outstanding credit to the various segments of infrastructure and the proportional increase were as follows: Power, roads, ports and telecommunications at Rs82,444 crore, up 38.2 per cent; iron and steel, Rs33,148 crore, up 25.6 per cent; petroleum, Rs16,277 crore, up 7.6 per cent and cement, Rs6,811 crore, up 18.2 per cent.
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Bank of Baroda to expand retail activities
Mumbai: Bank of Baroda plans to increase its retail credit to 25 per cent of the total credit of the bank, from the present level of 17 per cent.

The bank recently launched 51 additional `Baroda Moneyplex,' a one-stop boutique for retail products part the bank's retail initiative.

According to the bank, the Moneyplex is a branch within a branch, with discretionary lending powers, catering predominantly to the retail customers. This would include any loan given to an individual or very small businessmen. Typically the loans would amount to maximum of Rs1-2 crore.

Except mortgages, the processing of all other loans would be completed in about three days, while in case of mortgages it would take seven working days, due to the legalities involved. The bank has now 62 across 48 centres.
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