Rupee slips
Mumbai: The rupee slipped on Wednesday to fall close to the 46.50 levels intra-day on heavy demand for dollars from importers. The rupee opened at 46.36/38, moved down to a low of 46.46; but retrieved some of the losses to end at 46.38. On Tuesday the rupee ended at 46.34/36. Over all, the dollar gained against global currencies on continued speculations about an interest rate hike in the Federal Open Market Committee meet on Thursday. In the forward premia market, the six-month closed at 1.16 per cent (1.14 per cent) and the 12-month at 1.25 per cent (1.25 per cent).

Bonds: Bond prices weakened, but the sentiment was positive following statements from the Ministry of Finance that the Rs10,000-crore auction of Government securities, scheduled to be held in the first fortnight of July, could be reduced.

Prices gained about 15-17 paise in the morning, but gained by about five paise in the second half of the day.

Gsecs: The 7.59 per cent 10-year 2016 paper opened at Rs96.45 (8.12 per cent) and ended trade at Rs96.50 (8.11 per cent YTM), unchanged from the previous close. The 9.39 per cent five-year 2011 paper opened at Rs107.15 (7.64 per cent YTM) and ended trade at Rs106.99 (7.68 per cent YTM) against the previous close of Rs107.1 (7.66 per cent YTM).

Dealers said the domestic market has already factored in a 25 basis point rate hike by the US Fed, which is meeting on June 29. They next thing to watch out for is the likely domestic rate hike by the Reserve Bank of India in July, said the dealer.

Call rates: Call rates remained unchanged between 5.75 and 5.85 per cent.

Reverse repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted 21 bids amounting to Rs15,015 crore and in the second one-day reverse repo auction, 34 bids for Rs27,375 crore. There were no repo bids.

CBLO: The CBLO market saw 249 trades aggregating to Rs13,838.50 crore in the 5.50-5.68 per cent range.
Back to News Review index page  

RBI says banks must make full disclosure on derivative transactions
Mumbai: The Reserve Bank of India has come out with draft guidelines on derivative and hedge accounting for banks. According to the guidelines banks will have to make full disclosure in their balance sheet on their derivative transactions. Besides profit and loss arising out of derivative transactions, the disclosure should include the nature of the financial instruments used in such transactions.

"The standardised accounting practices will help market participants lead to increased activity in the derivatives market," said a senior bank official.

The draft guidelines, given in a discussion paper on the subject, suggest how to classify derivatives, how to account for the gains and losses on valuation and income recognition. At present banks in India are permitted to undertake transactions in interest rate derivatives and foreign exchange derivatives.

The RBI has suggested that all derivatives for 90 days or lesser will be designated by a bank in a new category called "Derivative through profit and loss unless they meet the hedge accounting criteria." Derivatives longer than 90 days shall be included in another category called "Derivatives though revaluation account."
Back to News Review index page  

National Insurance to tie up with rural banks
New Delhi: Targeting business worth Rs4 crore through bank assurance this year, the National Insurance Company is planning to tie up with rural banks to expand its business in Uttaranchal and Western Uttar Pradesh.

National Insurance has entered into an MOU with Ganga-Yamuna Gramin Bank to provide its insurance products in Uttaranchal. This is the fifth MOU the insurer has signed in recent months.

Last year, the company entered into a similar tie up with the Alaknanda Bank, a regional bank with a base in Uttaranchal.

Besides Alkananda and Ganga-Yamuna Gramin Bank, the company had also entered into agreements with Nainital Bank, Nainital-Almora Khastriya Bank and Kisan Gramin Bank earlier. There are more tie-ups in the pipeline.

Last year, the company earned a business of Rs2 crore through bank assurance. The total business of the company in the region is worth Rs100 crore.
Back to News Review index page  

Swiss bank opens rep office in Mumbai
Mumbai: Zurcher Kantonalbank, a cantonment bank from Switzerland, has inaugurated its representative office in Mumbai and is planning to offer wholesale banking for Swiss exporters who have business in India.

The bank will offer trade finance and letters of credit to Swiss exporters and is looking at volumes of about 300 million-500 million Swiss franc in one year through the wholesale business. It has no immediate plans of starting a retail business in India. Being a state owned bank, regulations require that a majority of its business should be with Swiss companies.
Back to News Review index page