Rupee rises marginally
Mumbai: The rupee rose marginally against the dollar due to the absence of strong demand from domestic oil companies. The rupee opened at 46.78/79 and touched an intra-day low of 46.83/84. It finally closed at 46.76/77. On Thursday, the rupee ended at 46.78/79.

The Federal Reserve Governor's statement hinting that there would be no further interest rate hike impacted the dollar, dealers said.
Forwards: In the forward premia market, the 12-month closed at 1.06 per cent (1.1 per cent) and the 6-month ended at .87 per cent (.94 per cent).

Bonds: Bond prices rose following Finance Minister, P. Chidambaram's statement that moderate inflation may lead to moderate prices. The market interpreted this as an indication that the Reserve Bank of India may not change inflation targets in the monetary policy next week, said dealers.

G-secs: The 7.59 per cent 10-year 2106 benchmark opened at Rs95.4 (8.29 per cent YTM) and closed at Rs95.71 (8.24 per cent YTM), against the previous close of Rs95.26 (8.31 per cent YTM). The 9.39 per cent-5 year-2011 paper opened at Rs106.40 (7.8 per cent YTM) and closed at Rs106.61 (7.75 per cent YTM) against the previous close of Rs106.30 (7.83 per cent YTM).

Call rates: Call rates remained unchanged between 5.75 and 5.85 per cent. In the first three-day reverse repo auction under LAF,

Reserve Bank of India received and accepted 24 bids amounting to Rs22,055 crore and in the second three-day reverse repo auction, 46 bids for Rs24,015 crore. There were no repo bids.

CBLO: The CBLO market saw 348 trades aggregating to Rs19,721.90 crore in the 4.00-5.85 per cent range.
Back to News Review index page  

Citibank net profit up 17.58 per cent
Mumbai: Citibank India has reported a 17.58 per rise in net profit to Rs705.5 crore in 2005-06. Citibank's total income stood at Rs4,107.4 crore for 2005-06.

The US-based Citigroup's combined India operations, including Citibank and consumer lending arm Citifinancial, reported its aggregate net profit for 2005-06 in India at Rs3,297 crore against Rs940 crore a year earlier.

The net profit in 2005-06 was higher because of Rs2,188 crore gain on sale of its stake in software solutions provider, i-flex solutions. A stake in i-flex of 43 per cent was sold for Rs2,464.

Across the corporate and consumer businesses, strong customer business growth was driven by an increase in the number of customers as well as by broadening relationships with existing customers. Buoyancy in the capital markets and overall economic growth also resulted in strong earnings momentum.

The combined revenue of all the group's entities in the country grew to Rs7,735 crore from Rs3,957 crore, mostly because of the i-flex stake sale. The revenue growth was also driven by rise in net interest margin and fee-based income.

Although Standard Chartered follows with a total income of Rs3,877 crore, its lead in terms of net profit shows that it enjoyed a higher profit margin.

The largest foreign bank, Standard Chartered Bank, had earlier said its net profit in 2005-06 was Rs905.9 crore, which keeps it ahead of all the foreign banks in terms of profitability.

Hong Kong and Shanghai Banking Corporation remains at the third spot with a net profit of Rs514.9 crore in 2005-06.
Back to News Review index page  

New pension system to ensure reasonable retirement income'
Bangalore: According to chairman of the Pension Reforms and Development Authority, D. Swarup, the defined contribution pension system would provide individual subscribers with an adequate income.

The Pension Fund Regulatory and Development Authority (PFRDA) officials said the system currently in place is defined benefit. The difference between the two systems is that the defined contribution scheme is funded, whereas the defined benefit liability is unfunded.

About one lakh employees are currently covered under the new pension scheme. The shift to the new pension scheme was done to reduce the fiscal stress on the Centre and States Governments. The combined liabilities of pensions for civil servants of States and the Centre were estimated at Rs65,000 crore as at the end of 2004-05.

The Central Government is currently paying only 8 per cent returns on the contributory pension fund covered under the NPS. However some of the States were paying even lower (5 per cent). The funds collected for pensions were being used to fund the revenue deficits of the respective State Governments, The Pension Fund Regulatory and Development Authority (PFRDA) officials said.

This was largely because the PFRDA was yet to become a statutory regulator since the Bill was yet to be passed. Swarup said the Bill was likely to be passed during the coming session of Parliament.
Back to News Review index page  

Forex reserves fall by $601mn
Mumbai: Foreign exchange reserves have fallen by $601 million due to a dip in foreign currency assets. According to the Reserve Bank of India for the week ended July 14 forex reserves decreased by $601 million to touch $162.659 billion due to the weakening of global currencies against the dollar. In the previous week forex reserves rose by $348 million to touch $163.260 billion. As per RBI, foreign currency assets decreased by $599 million to touch $155.716 billion. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of currencies such as euro, sterling and yen. Total FII outflows during the week in consideration were about $ 29.3 million.
Back to News Review index page  

BoM's Tier II bond issue gets fully-subscribed on opening day
Mumbai: Bank of Maharashtra's (BoM) Tier II bond issue of Rs225-crore launched was fully subscribed on the opening day and closed on the very first day.

The bonds are for a period of ten years with an annual coupon of 9.45 per cent and will be listed on the BSE and NSE, the bank said in a release.

The bank has also raised its interest rate structure for domestic term deposits. Accordingly, there has been an increase of 25 basis points for deposits from 15 days to 180 days, while for deposits with tenure of over one year, up to two years, the rate has been increased from 6.50 per cent to 6.75 per cent.

The interest rate for a period over six years to ten years now stands at eight per cent.

The bank has extended the facility of one per cent per annum increased interest rates for senior citizens.

The interest for deposits of senior citizens is nine per cent for the period over six years to ten years, the release added.
Back to News Review index page  

Banks can now raise long-term capital in foreign currency
Mumbai: In order to help domestic banks shore up their capital to meet the Basel-II norms, the Reserve Bank of India on Friday said banks can raise long-term capital in foreign currency.

Banks can raise funds through innovative perpetual debt instruments that can be part of their Tier-I capital. They are also allowed to raise upper Tier-II capital through issue of debt instruments. Earlier, in January 2006, RBI had permitted banks to raise these instruments in rupees.

Banks were required to obtain prior RBI approval on a case-by-case basis for issuing these instruments in foreign currency.

RBI has also allowed foreign institutional investors (FIIs) to invest in the Tier-I and upper Tier-II instruments in rupees, and this investment will be treated outside the current limit of $1.5 billion for corporate debt instruments. However, investments by FIIs in upper Tier-II instruments would be subject to a separate ceiling of $500 million.

The total Tier-I amount raised by banks through innovative instruments will be expected from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements. Tier-II capital still would be included under CRR and SLR. Among banks that were seeking RBI permission to raise hybrid capital in foreign currency were Bank of India and UTI Bank.
Back to News Review index page