Rupee, bonds rise
Mumbai: The rupee gained against the dollar as dollars flowed into the market. The rupee opened at 45.20/22 and touched an intra-day low of 45.25. Later it appreciated to close the day at 45.12/14, up from Tuesday's close at 45.26.

Forwards: In the forward premium market, the six-month closed at 1.45 per cent (1.53) and the 12-month ended at 1 per cent (1.03).

Bonds: In the bond market, prices rose slightly during the day, since concerns regarding a crunch in liquidity lessened.

G-Secs: The 8.07- 12-year 2017 paper opened at Rs 106.47 (7.21 per cent yield to maturity) and ended at Rs 106.55 (7.20 per cent YTM), higher than Tuesday's close at Rs 106.45 (7.21 per cent YTM). The 10.25 16-year 2021 paper opened at Rs 126.32 (7.36 per cent YTM) and closed at Rs 126.36 (7.36 per cent YTM), up from Tuesday's Rs 126.25 (7.37 per cent YTM).

Call rates: The call rate closed at 6.90 (6.50-6.75 per cent) but touched an intra-day high of 7.25 per cent.

Reverse Repo: In the one-day reverse repo auction, RBI accepted three bids for Rs 900 crore, and in the repo auction, it accepted 36 bids for Rs 22,165 crore. In the second auction, RBI received two bids for Rs 1,115 crore in the reverse repo auction and 11 bids for Rs 4,520 crore in the repo auction.

CBLO: In the CBLO market, there were 300 trades for Rs 9,641.50 crore in the range of 6.20-6.50 per cent.
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IMD redemption begins today
Mumbai: The total outgo from foreign exchange reserves for the redemption of the India Millennium Deposits (IMD) is stated to be $7.079 billion, according to the Reserve Bank of India.

So far, RBI bank has sold foreign exchange worth $5.107 billion to the State Bank of India, for which SBI has paid Rs 23,044.87 crore. The remaining amount of $1.972 billion would be sold on December 29, the date of the IMD redemption.

The IMD bond was issued in year 2000 to increase the country's foreign exchange reserves. Banks had mobilised $5.5 billion through the issue. The interest rates were 8.5 per cent for US dollar deposits, 7.85 per cent for sterling deposits, and 6.85 per cent for euro deposits, which were higher than normal FCNRB deposits.

SBI has received around 70,000 redemption warrants, said a bank official. Payouts for these warrants are in process.

An SBI official said that 30-40 per cent of the IMD funds are leveraged, meaning that they are held by institutions or banks. The rest are held by individual investors and will come back into the Indian banking system through deposit schemes offered by banks or mutual funds.

The RBI intervened on December 27 and bought dollars in the market to infuse rupees into the system, said dealers.
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RBI asks RRBs to offer credit cards, no frills account to rural masses
Mumbai: The Reserve Bank of India has asked Regional Rural Banks (RRBs) to offer banking services such as `no frills' accounts and credit cards in rural areas. The procedure for opening the `no frills' account would be simple and they would be an overdraft facility.

In order for RRBs to deliver credit in rural areas, they would be permitted to avail lines of credit from sponsor banks at reasonable rates of interest, access inter-RRB term money or borrowings and repo or CBLO markets, said the release from RBI.

RBI said RRBs can also set up ATMs, issue debit and credit cards and also handle pension. The general credit cards issued by RRBs would operate like Kisan credit card. Commercial banks and RRBs have been asked to tie up with local post offices, schools, primary health centres, local Government functionaries, farmers' associations or clubs, and so on, for issuing general credit cards.
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PNB to disburse Rs 1,155 cr as retail loans in Punjab
Ludhiana: Punjab National Bank plans to double its retail loans disbursement to Rs 1,155 crore in Punjab by the end of the current fiscal as against Rs 750 crore disbursed in the last fiscal.

Registering a growth of 43 per cent, PNB has disbursed retail loan to the tune of Rs 568 crore till November 2005 in the state as against the retail loans in the corresponding period last year.

The bank is providing various retail lending schemes specially designed to suit needs of all types of customers at attractive interest rates through all its branches and specialized cells known as 'Tatkal Suvidha Kendras', he said.
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KVB launches one-month special campaign on term deposits
Chennai: Karur Vysya Bank has launched a special one-month campaign, offering an additional 0.5 per cent interest on term deposits.

Beginning from January 1, 2006, the one year to three-year term deposits of individuals and non-profit organisations would attract 7 per cent interest. The regular rate was 6.5 per cent for 1-3 year term deposits, the bank said in a statement issued here.

In addition, the bank has also announced an additional rate of 0.25 per cent for single value deposits of Rs 15 lakh to Rs 50 lakh in the time bucket of 91 days to one year.
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ICRA gives 'mfAAA' rating to HDFC MF scheme
New Delhi: ICRA has assigned highest credit quality rating 'mfAAA' to HDFC's Cash Management Fund - Savings Plus Plan.

The rated debt fund carries the lowest credit risk, similar to that associated with long-term debt obligations rated in the highest-credit-quality category, ICRA said in a release.
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RBI pumps in Rs 21,415 cr to ease liquidity in view of IMD redemption
Mumbai: The Reserve Bank of India (RBI) injected Rs 21,415 crore funds into the market on Tuesday. It is a record high infusion through its repo auction mechanism from the liquidity adjustment facilities (LAF).

Earlier on Monday, the central bank pumped in over Rs 17,000 crore to manage the liquidity. While on the reverse repo front it absorbed meagre amount worth Rs 480 crore. This liquidity mismatch also prompted even the call money rates to rise up to 7 pert cent.

"The major reason for the liquidity squeeze can be accounted to the India millennium deposit (IMD) redemption due on Dec. 29. The liquidity mismatch started with the advanced tax payment worth Rs 20,000 crore earlier this month," said a dealer from private sector bank.
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