Rupee range bound
Mumbai: The rupee remained flat against the dollar on Thursday.

The domestic currency opened at 44.37/39 and moved between 44.33 and 44.35 during the day before closing at 44.37/38, almost the same level as Wednesday's 44.38.

Dealers said nationalised banks were seen buying dollars.

Forwards: In the forward premia market, the six-month closed at 2.32 per cent while the 12-month ended at 1.83 per cent.

Bonds: In the bond market, traded volumes were under Rs1,000 crore and prices were flat.

G-Secs: The 8.07-11 year-2017 paper opened at Rs104.87 (7.41 per cent YTM) and closed at Rs104.91 (7.40 per cent YTM), tad lower than Wednesday's at Rs104.93 (7.40 per cent YTM).

The 9.39 - 5 year-2011 paper opened at Rs109.72 (7.16 per cent YTM) and ended at Rs109.85 (7.13 per cent YTM), higher than Wednesday's close at Rs109.75 (7.15 per cent YTM).

Call rates: The call rate closed at the same level of 6.50/6.60 per cent.

Repo auction: In the first one-day auction, the Reserve Bank of India (RBI) received no bids in the reverse repo and six bids for Rs995 crore in the repo. In the second auction, the RBI received and accepted five bids for Rs530 crore in reverse repo and three bids for Rs290 crore in the repo auction.

CBLO: In the CBLO market, there were 395 trades for Rs21,421.15 crore in the 6.01-6.35 per cent.
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RBI warns banks on real estate exposure
Mumbai: The Reserve Bank of India has cautioned banks against excessive lending to the real estate sector and said that banks should disburse loans involving real estate only after obtaining all government clearances.

The RBI said while the development of real estate was welcome, there was a need for banks to curb excessively risky lending by exercising selectivity and strengthening the loan approval process, the notification said.

The Economic Survey released last week had also indicated significant rise in bank credits to the real estate sector.
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SBI to launch new deposit product
Mumbai: State Bank of India (SBI) plans to launch a new deposit product and also get into increased securitisation to mobilise resources, said SBI chairman AK Purwar.

He said "The bank is expected to get into securitisation by June-July. Mutual funds, life insurers, credit card companies, general public, institutions, public funds, and pension funds are likely to be the buyers," he added.

Following the tax sops to fixed deposits under the Budget, the bank is considering to unveil a new product. "We are developing a product and will release it shortly," he said.

The product will be a five-year deposit, though the bank has not yet decided on the rate. "As soon as we fix the rate we will let you know," he said.
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Uco floats maiden hybrid tier-II bond
Mumbai: Uco Bank is floating a hybrid upper Tier II bond in the market and will be the first bank to do so. The bond carrying 15- years of maturity offers 8.75 per cent interest. However, the bank will service its obligations of coupon and principal till the time its capital adequacy remains 9 per cent.

If the capital adequacy falls below 9 per cent, bondholders will have to wait till the bank revives back to healthy adequacy ratio of 9 per cent. The bond becomes eligible for trading next week.

The bank will be raising around Rs200 crore through this issue. Market players said provident funds are likely to be the only investors in this bond as the market may not find the coupon attractive enough since one-year money is available at the same rate of
8.75 per cent.

These instruments are referred to as hybrid since they have various features of equity built into them which take them closer to equity in substance and gives the regulator the comfort that these will be available to absorb losses, when required.
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SBH to enter capital market
Coimbatore: State Bank of Hyderabad is planning to enter the capital market next fiscal.

The managing director, Amitabha Guha, said the bank was governed by the Subsidiary Act and an amendment would be necessary for it to debut into the capital market. He said a due diligence would be required now. He said it was too early to spell out the size or other details of the proposed issue.

According to him, the bank needed funds to strengthen its capital base and put in place a system that would be `Basel II ready'. "We are targeting to double our business to Rs1 lakh crore by March 2008, expand our branch network from 941 to 1,000 and reduce the net NPA significantly."
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