Forex reserves down $793mn at $162.962bn
Mumbai: Foreign exchange reserves declined for the first time in seventeen weeks in the week ended May 19, mainly due to dollar weakness.

The forex reserves were at $162.962 billion, down by $793 million, as against $163.755 billion in the earlier week. Last week reserves had surged by over $1.3 billion.

As per the Reserve Bank of India figures, for the week under consideration, foreign currency assets fell by $787 million to touch $155.879 billion. The FII outflows from the domestic equity market were around $858.2 million in the same period.

Gold was unchanged at $6.301 billion.
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RBI drafts fair practice guidelines for NBFCs
Mumbai: The Reserve Bank of India (RBI) has issued draft guidelines on a fair practices code for non-banking finance companies (NBFCs). The bank proposes to make the code applicable from June 30, 2006.

The draft code requires NBFCs to convey in writing to the borrower the amount of loan sanctioned along with the terms and conditions, including annualised rate of interest and method of application of interest and keep the acceptance of these terms and conditions by the borrower on its record.

NBFCs would also have to devise a system of giving acknowledgement for receipt of all loan applications. The code also provides that the borrower would have to be given a notice of any change in the terms and conditions including disbursement schedule, interest rates, service charges and prepayment charges. NBFCs should also ensure that changes in interest rates and charges are effected only prospectively.

The guidelines also say that post disbursement, supervision by NBFCs should be constructive and the genuine difficulties which the borrower may face, may be given due consideration. It further states that in the matter of recovery of loans, the NBFCs should not resort to harassment. The Board of Directors of NBFCs would have to lay down the appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. Such a mechanism should ensure that all disputes arising out of the decisions of lending institutions' functionaries are heard and disposed of at least at the next higher level.
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Weak public sector banks may merge with stronger ones: Chidambaram
Mumbai: A couple of "weak" public sector banks may merge with stronger ones in 2006-07, finance minister P Chidambaram has said, while addressing the annual general meeting of the Indian Banks' Association.

"We expect one or two cases of consolidation this year, which would be driven by the need to acquire size and muscle and not driven by regulatory considerations, " Chidambaram said.

Consolidation is being driven by the need for revenue growth, savings in cost and to improve efficiency, he said. He pointed out that Indian banks would need Rs42,000 crore of capital by 2010 to meet the stringent Basel II norms.

Basel II is the revised capital adequacy framework that requires capital allocation for operational risk, in addition to credit and market risks.

He also said that the government was planning to bring a comprehensive legislation on micro-finance.
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SBT FY06 net at Rs.258.68-cr
Thiruvananthapuram: The State Bank of Travancore (SBT) has posted a net profit of Rs258.68 crore for FY06 and has also declared a 100 per cent dividend.

The total business of the bank increased by Rs4,989 crore. Gross NPAs were brought down to 3.18% in March 2006 from 4.28% in March 2005, while net NPAs were down to 1.47% in March 2006 from 1.81% in March 2005.

Total deposits grew by Rs1,863.50 crore in FY06 to touch Rs25,996.51 crore. Personal deposits grew by Rs1,719 crore. Deposits from NRIs grew by Rs689.24 crore to Rs7,857.97 crore. The credit-deposit ratio of the bank increased to 73.30% in FY06 from 62.88% last fiscal.

The bank continues to be the market leader in Kerala, with 22% market share in business.
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StanChart net up 51 per cent at Rs.905.9-cr
Mumbai: Standard Chartered Bank has reported a 51% increase in net profit at Rs905.9 crore for the year ended March 31, 2006, as compared to Rs60.16 crore in FY05.

Total income moved up 28% to Rs3,877.90 crore, from Rs3,018.40 crore in FY05. Total assets have increased 30% to Rs48,183.50 crore, while advances have gone up 20% to Rs24,076.7 crore. Deposits were up 26% at Rs28,459.80 crore.

Neeraj Swaroop, CEO-India, said: "Some of our new businesses like SMEs, mid-markets and corporate finance advisory have done very well, and we will continue to grow these in the coming year."
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SBT targets Rs.9,000-cr growth in business
Thiruvananthapuram: The State Bank of Travancore (SBT), which recorded total business of over Rs45,000 crore in 2005-06, is aiming at a business growth of about Rs9,000 crore in the current year.

The bank is also planning to open about 40 new branches and add 100 more ATMs to its network during the year, officials said.

The bank's retail lending was projected to grow by Rs3,160 crore in 2006-07. It has also projected a growth of Rs870 crore in housing loans; Rs810 crore in agricultural lending; Rs200 crore in education loans and Rs400 crore in loans to the small business segment.
For 2005-06, SBT has posted a net profit of Rs258.68 crore, as against Rs247.13 crore in the previous year. It has also declared a dividend of 100 per cent, up from 75 per cent for the previous two financial years.
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