Rupee weakens
Mumbai: The rupee declined against the US dollar Wednesday as state-run banks and oil companies bought dollars. The rupee opened at 45.04/05 and ended at 45.12/13, lower than Tuesday's close of 45.

Forwards: In the forward premia market too there was buying. The six-month premia closed at 1.26 per cent (1.15 per cent) and the 12-month ended at 1.22 per cent (1.15 per cent).

Bonds: Bond prices fell due to a rise in US Treasury yields.

G-secs: The newly auctioned 7.40 per cent 6-year-2012 paper opened at Rs101.60 (7.07 per cent YTM) and closed at Rs101.36 (7.12 per cent YTM). The benchmark 7.59 per cent 10-year-2016 paper opened at Rs101.61 (7.35 per cent YTM) and closed at Rs101.30 (7.40 per cent YTM), down from Tuesday's Rs101.70 (7.35 per cent YTM).

Call rates: The call rate closed at 5.55 per cent (5.5-5.6).

Repo auction: In the first one-day reverse repo auction under LAF, the RBI received and accepted 34 bids amounting to Rs33,650 crore and 38 bids for Rs29,875 crore in the second auction. There were no repo bids.

CBLO: The CBLO market saw 307 trades, aggregating Rs17,217.65 crore in the rate range of 5.15-5.50 per cent.
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Corporation Bank Q4 net down 6.8 pc
Mumbai: Corporation Bank has posted a net profit of Rs100.27 crore for the quarter ended March 31, 2006, which is lower by 6.79 per cent from the Rs107.57 crore recorded in the corresponding period last year. The bank said the drop in profit was mainly because of the rise in cost of funds coupled with the higher provisioning for standard assets. Total income for the quarter was higher at Rs862.83 crore (Rs703.25 crore).

The bank's board has recommended a dividend of Rs 7 per share, which includes the centenary dividend of 50 paise.
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PSU bank staff may have to pay tax on HRA
Mumbai: The employees of Mumbai-based public sector undertakings (PSUs) may have to pay additional tax on HRA.

This is as the income tax department has moved the Bombay High Court to vacate a stay on an old circular issued by the ministry of finance to deduct tax on their house rent allowance (HRA).
As per the circular issued in 1994, all PSUs, including banks, were directed to add 20 per cent of HRA paid to their employees to their total taxable income. The bank employees' union had then filed a plea and subsequently obtained a stay.

The case is pending with the court since then and the IT department is of the view that as per the circular, 20 per cent of HRA needs to be added to the salary and deducted by the organisation as tax deducted at source (TDS). This would be done as per section 17(2) of the Income Tax Act.

If the judgment comes in favour of the department, it may be applicable with retrospective effect which will turn out to be a huge burden for the staff, said a banking source.
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Canara Bank to go in for image makeover
Bangalore: Canara Bank is readying for an image makeover and is going in for a major brand push for this. The bank aiming to positioning itself as a financial supermarket is trying to get more customers. The bank has a customer base of over 25m.

The bank has also set up a customer relationship management wing whose aim is to undertake customer education, customer engagement and help in providing better customer value. As a part of beefing up its marketing team it has roped in 62 of its staffers as members of this team with plans to increasing this number.
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RBI puts riders to RNBC investment norms
Mumbai: The Reserve Bank of India has added some riders for residuary non-banking companies (RNBCs) to comply with the prudential norms in regard to investments.

The RBI has said the money kept by RNBCs in current accounts of banks at the end of each quarter will not be considered as part of directed lending. It has also disallowed treatment of tax refunds as directed investment. The twin measures will take away the flexibility that the RNBCs have been enjoying in investment policies.

As per RBI norms, RNBCs will be required to invest 100 per cent of their deposits in government securities, deposits in other banks and corporate bonds with double-A (AA+) and above rating from April 2007 in an effort to rationalise the pattern of direct investments by RNBCs to reduce the overall systemic risk in the financial sector.
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Punjab & Sind Bank turns around
New Delhi: Punjab & Sind bank has recorded a turnaround in for the fiscal year 2005-06. The bank has reported a net profit of Rs108.32 crore as against a net loss of Rs71.06 crore recorded during fiscal 2004-05.

A release issued by the bank also said that total business registered an increase of more than 26 per cent to touch Rs26,724 crore as on March 31,2006 as against total business level of Rs21,174 crore as on March 31,2005.

During the year 2005-06, treasury profits of the bank declined substantially to Rs26.62 crore as against a treasury profit level of Rs144.74 crore recorded in 2004-05. As a strategic shift, the bank has reduced its investment portfolio considerably and utilised the funds for growth of credit portfolio. Also due to rising interest rate scenario during the year, the bank said there were few opportunities for booking of treasury profit.
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