S&P says rate hike could have adverse effects on economy
Mumbai: Global rating agency, Standard & Poor's (S&P), in a research report titled "Credit quality of Asia-Pacific sovereigns proves robust so far in 2006," has said that an increase in interest rates would have an adverse effect on the 'fiscally weak' Indian economy.

It said India's fiscal weakness is one of the worst among rated sovereigns in the Asia-Pacific region, which makes it particularly vulnerable to any decline in growth rates or an increase in interest rates. Interest rates in India have been rising since January 2006 with banks having increased their lending rates to both corporates and retailers by as much as 3 per cent.

S&P said going forward, tightening monetary policy, in response to rising inflation, could rein in growth, though the general appreciation of the region's currencies against those of major trading partners should temper the need for further interest rate hikes.
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ICICI Bank home loans rates rise
Mumbai: ICICI Bank has announced an increase in home loan interest rates by 0.5 percentage points and will be effective from May 8. This move will increase the interest rates on floating home loans to 9 per cent from 8.5 per cent. The interest rate on fixed rate home loans will also go up from 9.75 to 10.25 per cent.

ICICI Bank said the floating rate hike for existing customers would be effective from July 1, 2006. The existing fixed rate home loan customers will, however, not be impacted by this increase and their contracted rates will remain unchanged, ICICI Bank said in a news release.

Shares of ICICI Bank fell by Rs21.70 to Rs638.60 in Friday's trade on BSE.
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United Western bank plans rights issue
Mumbai: The Satara-based United Western Bank is considering a second rights issue of equity shares for raising resources to meet capital adequacy norms. It has chalked out plans to raise over Rs 500 crore including infusion of capital by roping in a strategic investor.

The board would meet on May 15, 2006 to consider the proposal for issuing equity shares on rights basis the bank informed the Bombay Stock Exchange.

If the approval is issued it would be a second round of capital infusion through rights issue for the bank. The bank raised Rs43 crore through rights issue in the fourth quarter of 2005-06. It issued the equity shares on rights basis in the ratio of one share (Rs10 each) at a premium of Rs14 for every two shares held by investors.
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BoI plans to raise $ 250mn overseas
Hyderabad: Bank of India (BoI) is preparing to go for another round of overseas fund-raising to raise a minimum amount of $ 250-million. The bank has applied for RBI approval for the issue and expects to get the approval shortly so as to tap the global market at the earliest. The bank had recently raised the first tranche of $ 250-million under medium term note (MTN) programme of $ 1-billion for its international operations.
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Vijaya Bank reports Rs.35 crore loss in Q4
Bangalore: Vijaya Bank has reported a 67 per cent drop in net profit for fiscal 2006 due to higher provisioning and depreciation. The Vijaya Bank chairman and managing director, Prakash Mallya, said net profit for fiscal 2006 stood at Rs126.88 crore as against the previous year's figure of Rs380.57 crore. He said, "Vijaya Bank's provisions for non-performing assets and depreciation of investments stood at Rs538.77 crore (Rs416.21 crore), "The increased provisions were on account of the merger of its housing finance subsidiary with the bank."

The bank also raised provisions for standard assets as prescribed by the RBI. The high provisioning resulted in the bank reporting a net loss for the fourth quarter of the last financial year of Rs34.53 crore as opposed to Rs155.92 crore profits in the same quarter of the previous year. For the current financial year, Vijaya Bank is targeting a business growth of Rs60,000 crore comprising Rs36,000 crore of deposits. Mallya said the bank also plans to step up recovery efforts.
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