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Rupee lower; bonds down
Mumbai: The rupee fell slightly against the US dollar on Wednesday to close at 45.77/78, about three paise lower than Monday's level of 45.73.

Forwards: The forward premia market inched up, with the six-month closing at 0.5 per cent (0.47 per cent) and the 12-month closing at 0.45 per cent (0.42 per cent).

G-secs: The 7.37 per cent-9-year-2014 paper closed at Rs102.47 (6.07 per cent), against Monday's level of Rs102.5 (6.97 per cent). The 7.49 per cent-12-year-2017 paper ended trade at Rs101.56 (7.28 per cent), a tad lower than Tuesday's level of Rs101.58 (7.28 per cent YTM).

Call rates: Call rates were between 6.30-6.40 per cent (6.25-6.35 per cent).

Reverse Repo: In the one-day reverse repo, under the LAF, the RBI received and accepted one bid amounting to Rs100 crore. In the one-day repo auction, the RBI received and accepted eight bids amounting to Rs3,600 crore.

CBLO: In the CBLO market, there were 298 trades for Rs12,058.65 crore in the rate range of 5.5-6.4 per cent.
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FM favours PSU banks consolidation
New Delhi: Finance minister P Chidambaram has said that the government favours consolidation among state-run banks but will not force mergers and the initiative would have to come from bank managements and unions.
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Banks reducing home loan exposures
Bangalore: Public and private sector banks have started limiting exposures to housing loan assets in order to restrict the build-up of non-performing assets in their balance sheets. Housing finance has shown the highest growth rate in the non-food credit portfolio and is now almost 50-60 per cent of the overall retail assets.

Bankers said the containment steps would not lead to reduction of housing finance portfolios but growth would not be allowed to take place on the same scale as before. Hence within the overall credit portfolio, the share of housing loans would be restricted to less than 50 per cent instead of at the current levels.

The aggregate exposure to housing and real estate sector of banks is estimated to be at close to Rs30,000 crore.

The RBI is worried that the housing finance portfolios would be adversely impacted by a meltdown in the real estate sector, leading to a build-up of large non-performing assets at a time when banks have managed to bring down the average gross non-performing loan ratios to 4 per cent by writing off liquidation and through recoveries.

Banks have thus begun demanding additional security from borrowers, over and above the mortgages to ensure that housing loans are not obtained for real estate speculation.
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SBI Life ties up with Dewan Housing
Mumbai: SBI Life Insurance has tied up with Dewan Housing Finance Corporation (DHFL) to offer life insurance to the company's home loan borrowers. The scheme, called "Amar Chhaya", gives customers the flexibility to either pay a single premium or get it financed by DHFL, where the premium will be adjusted with EMI of the home loan.

Dewan Housing currently has tie-ups with Cholamandalam MS General Insurance Company to cover home loan borrowers against job loss and natural calamities.
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SBI targets Rs.200-500 crore from IMD redemption
New Delhi: SBI is looking at tapping around Rs200-500 crore from the redemption of Indian Millenium Deposits, due next month. It hopes to rake in this amount through its recently launched insurance policy "Dhana Vridhi," said S. Krishnamurthy, MD and CEO, SBI Life Insurance.

Dhana Vriddhi is a single premium plan that assures an annual guaranteed compound return of 5.75 per cent on the sum assured over a five-year duration.

SBI Life is set to cross Rs1,000 crore in terms of premium by the end of the fiscal and the company had so far garnered Rs305 crore in the half-year period ended September 2005, he said.

The company's capital adequacy ratio was at 15 per cent and it planned to raise Rs100 crore through a convertible bond issue. It was also looking at more acquisitions in the home finance segment.
SBI Life has also set a target of covering around 3-lakh home loan borrowers this year.
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GTB defaulters come to the negotiating table
Kolkata: Many accounts, belonging to the erstwhile Global Trust Bank (GTB), against whom the Central Bureau of Investigation (CBI) had registered cases, have come to the negotiating table for settlement, said the chairman and managing director of Oriental Bank of Commerce, K.N. Prithviraj.

Oriental Bank of Commerce (OBC) had filed FIRs with the CBI in 29 cases involving 50 borrowal accounts, totalling NPAs worth more than Rs1,300 crore. CBI has registered cases on 11 of them.

OBC has set a recovery target of Rs500 crore for 2005-06 , and till September 30, had recovered nearly Rs200 crore.

In 2003-04, OBC's NPA level was zero but the gross NPA to gross advance ratio jumped to 9.1 per cent in 2004-05 following the merger of GTB. The target for the current year has been set at 7 per cent. The net NPAs to net advances ratio is targeted at 0.5 per cent for the current year. Till September 30, it was 0.8 per cent.
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Union Bank gets approval for public issue
Mumbai: The Union Bank of India has received approval from the Government for its second public issue. The public issue of 4.5 crore equity shares will be through a book-building process, said a press release.

Post issue, the Government stake in Union Bank of India is likely to come down from 60.85 per cent to 55.45 per cent.

The bank is raising money to shore up its Capital Adequacy Ratio in view of the robust growth in credit and the Basel II requirements. The bank recently received RBI approval for setting up a representative office in Shanghai, China. Earlier, it received permission to open representative offices in Dubai and Doha.

Earlier Union Bank had raised Rs288 crore in its initial public offer in August 2002. Its shares moved up by Rs1.70 to Rs119.10 on the BSE on Wednesday.
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