Rupee unchanged
Mumbai: The rupee weakened against the US currency on Monday due to sustained dollar buying by State-run banks on behalf of the Reserve Bank of India and oil companies, but ended nearly unchanged. The rupee opened at 44.57 and ended at 44.67 against Friday's close of 44.65.

Bonds: Prices fell in the bond market in response to the statements made by the deputy governor of the RBI. Dealers said that Rakesh Mohan's statement that credit growth at the current rate could raise liquidity management problems for the banking system was interpreted in a negative way and caused the bond market to fall marginally.

G-secs: The 9.39-5 year-2011 paper opened at Rs109.70 (7.14 per cent YTM) and closed at Rs109.62 (7.16 per cent YTM), lower than Friday's Rs109.72 (7.13 per cent YTM). The 8.07-11 year-2017 paper opened at Rs105 (7.39 per cent YTM) and ended at Rs104.7 (7.43 per cent YTM) down from Friday's close at Rs105.05.

Call rates: The call rate closed at 6-6.25 per cent (6.6-6.8). There was significant improvement in liquidity, as expenditure of the government is believed to be entering the system.

Repo auction: In the one-day repo, under the liquidity adjustment facility, RBI accepted eight bids, amounting to Rs2,920 crore. In the second auction, the central bank accepted five bids for Rs1,575 crore through the reverse-repo and one bid for Rs500 crore in the repo. The CBLO market saw 400 trades, aggregating to Rs21,845.25 crore in the range of 5.55-6.46 per cent.
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RBI relaxes global investment norms
Mumbai: It will now be easier for Indian companies to provide guarantees for their overseas investment or to disinvest from their foreign venture with the Reserve Bank of India issuing a notification liberalising the procedure for overseas investment.

As per the new norms, corporates can offer any form of guarantee for their overseas investment under the automatic route, provided all financial commitments are within 200 per cent of their net worth and the guarantee amount is specified upfront. Hence companies can offer corporate, personal, primary or collateral guarantees while guarantees by wholly-owned subsidiaries (WOS), sister concerns, joint ventures (JVs) or associates of a company will also be permitted. At present, only the promoter company is permitted to offer guarantees on behalf of its wholly-owned subsidiaries or joint ventures under the automatic route. Personal, collateral and third party guarantees require prior approval of the RBI on a case-by-case basis.

Guarantees issued by banks in India in favour of subsidiaries or joint ventures abroad will be outside this ceiling and subject to prudential norms issued by the RBI.

The RBI has also permitted Indian companies to disinvest without its approval where the JV or WOS are listed on the overseas stock exchange, the Indian promoter company is listed in India and has a net worth of not less than Rs100 crore, the Indian promoter is an unlisted company and the investment in overseas venture does not exceed $10 million.
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IndusInd in tie up with UAE bank
Mumbai: IndusInd Bank has tied up with Union National Bank, based in Abu Dhabi through which it would provide its services and products to non-resident Indians in the UAE. The two banks today signed an agreement to treat each other as preferred partners and promote each other's banking services.

This tie-up gives both banks access to each other's market without capital outlay, he said.

Union National Bank is jointly owned by the Governments of Abu Dhabi and Dubai and has a total asset base of $9.5 billion and net profit of $314 million. It has 37 branches across the UAE.

The alliance would cover banking services in retail banking, trade finance, global banking and investment banking.

IndusInd Bank is present in 110 locations in India and two representative offices in Dubai and London. The bank has also got approval for 11 more branches in India.
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Bajaj Allianz Life adds more capital
Mumbai: Bajaj Allianz Life has added a capital of Rs132 crore, taking its total capital base to Rs500 crore.

Sam Ghosh, country manager, Allianz and chief executive officer, Bajaj Allianz Life Insurance Company, said, "With this infusion of capital we would continue with our expansion plans and achieve sustained growth year after year".
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Reverse repo rate may not be altered
Mumbai: The Reserve Bank of India (RBI) may not make further changes in the reverse repo rate in the forthcoming annual policy and the measure could lead to further hardening of interest rates, say banking sources.

The sources said that global interest rate movements and the decision of the US Federal Reserve on whether or not to hike the Fed rate by another 25 basis points in the forthcoming March 28 meeting, would weigh heavily on the RBI while deciding on a reverse rate repo rate revision.

The RBI feels that the liquidity situation will improve in the first two quarters of 2006-07. At an internal meeting at RBI last week, it has been estimated that a total of Rs50,000-60,000 crore would flow into the system through coupon redemptions and government security maturity.

The funds mopped up through auctions of treasury bills and bonds under the market stabilisation scheme (MSS) will continue to enter the system as well. Further, the foreign exchange inflows into the Indian equity market are likely to continue at current pace.
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