Rupee weakens against dollar
Mumbai: The rupee weakened against the dollar slightly due to month-end demand. The rupee opened at 45.90/92 and closed at 45.9550/9650, lower than Tuesday's 45.95.

Forwards: In the forward premia market, the 6-month premium closed at 1.14 per cent (1.12) and the 12-month at 1.22 per cent (1.21).

Bonds: Bond prices did not see much movement, as there was no buying interest.

G-secs: The 7.59 per cent - 10 year-2016 benchmark paper opened at Rs98 (7.88 per cent YTM) and closed at Rs97.83 (7.91 per cent YTM), almost the same level as Rs97.84 (7.91 per cent YTM). The 9.39 per cent-5 year-2011 opened at Rs107.70 (7.52 per cent YTM) and closed at Rs107.67 (7.53 per cent YTM).

Call rates: Call rates closed at 5.80-5.85 per cent (5.75-5.85).

Reverse repo: In the first one-day reverse repo auction under LAF, Reserve Bank of India received and accepted 27 bids amounting to Rs21,795 crore and in the second one-day reverse repo auction, 36 bids for Rs20,855 crore.

CBLO: The CBLO market saw 270 trades aggregating to Rs16,451.5 crore in the 5.63-5.71 per cent range.
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Indian Bank restructures capital
Bangalore: Indian Bank wants to convert Government equity into preference shares as part of a capital restructuring exercise.

Indian Bank's chairman and managing director, Dr K.C. Chakrabarty, said, "We have sought conversion of at least Rs400 crore into tier-II preference capital." He said that the preference shares, proposed to be issued, would be close ended and would comprise part of the tier-II capital. The preference capital would be for 15 years with a coupon of 8 per cent, he added.

The preference capital would shrink the bank's equity base to Rs343.82 crore from Rs743.82 crore and would help in better price realisation for the bank's initial public offering early next year.

The bank has a tentative proposal to make an issue of 80 million shares, for which the red herring prospectus would be filed with the capital markets regulator by the year-end.

Currently, the bank has a capital to risk weighted asset ratio of 13.19 per cent, of which 10.2 per cent comprised of tier I (net worth).
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HDFC Bank launches online money transfer for NRIs
Mumbai: HDFC Bank has launched an online remittances service that allows non-resident Indians (NRIs) to send money through the Reserve Bank of India's real time gross settlement system (RTGS).

The online money transfer through RTGS will be available for remittances from the USA, UK and Singapore, which will ensure the amount is credit to the recipients' accounts the same day or latest the next day. In normal online remittances, it takes 3 days for the recipients' accounts to get credit.

This is an attempt by HDFC Bank to get more fee income through an increase in its share in online remittances, currently dominated by ICICI Bank and emit2india.com.

Of the $22 billion inward remittances in 2005-06, about $2.5 billion were sent through online services. Half of the remittances are made through cheques and wire transfers and the balance through money transfer services like Western Union Money Transfer.
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LVB to consider bonus, rights
Chennai: The board of directors of Lakshmi Vilas Bank' will meet on July 6 to consider the issue of bonus and rights shares.

The chairman and managing director, of the bank R M Nayak, said that there was "no compulsion" to raise capital even though the bank's capital adequacy ratio stands at 10.8 per cent.

With last year's retained earnings of Rs16 crore, the bank's networth has grown to Rs327 crore, against the regulatory requirement of Rs300 crore. The bank plans to raise its total business from Rs7,400 crore in 2005-06 to Rs10,000 crore in the current year.

Deposits are projected to grow from Rs4,200 crore to Rs6,000 crore; advances from Rs3,200 crore to Rs4,000 crore, Nayak said. Profits are expected to grow commensurately. Last year, the bank reported a net profit of Rs22.5 crore, compared with Rs3 crore in the previous year.
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ICICI, OBC best in NPA management: Assocham
New Delhi: Industry body Assocham has said that ICICI Bank and Oriental Bank of Commerce are the two top performing banks in terms of reducing non-performing assets (NPA). ICICI Bank has been able to cut its NPA by 65 per cent while OBC reduced its NPA by 61.5 per cent as on March, 2006 as compared to March 2005, an Assocham Eco Pulse study showed.

Out of the 13 banks tracked by the study, OBC emerged as the best performer in terms of size of net NPAs which was at 0.5 per cent while ICICI Bank's net NPA stood at 0.71 per cent.

The Indian Overseas Bank, Corporation Bank, UTI Bank and Bank of Baroda were the next best performers in cutting their net NPAs.

The study found that most of the commercial banks have substantially reduced their non-performing assets ranging between 29 per cent and 65 per cent, as they registered a handsome growth in their retail advances in the fourth quarter of the last fiscal.
This is mainly due to the low level of default in the retail lending sector as compared to other sectors.
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