Rupee marginally up against the dollar
Mumbai: The rupee gained marginally against the US dollar on Friday due to FII inflows into the domestic equity market.

The home currency opened at 46.54/56 and touched an intra-day low of 46.64 before closing at 46.55. In the overseas market, the dollar strengthened against the yen due to the cross currency play in the market.

Forwards: In the forward-premia market, the six-month ended at 1.04 per cent (1.03 per cent) and the 12-month ended at 1.16 per cent (1.14 per cent)

Bonds: Bond prices were range-bound but ended flat for the third consecutive day. The traded volume continued to be low at Rs780 crore on the order-matching system. Dealers were not taking positions ahead of the Rs9,000 crore auction and the US Federal Open Market Committee meeting, both scheduled on August 8.

G-secs: The 7.59 per cent-10 year-2016 paper opened at Rs95.40 (8.29 per cent YTM) and closed at Rs95.42 (8.28 per cent YTM), slightly higher than Thursday's Rs95.36 (8.29 per cent YTM. The 7.55 per cent-4 year- 2010 paper opened at Rs99.47 (7.71 per cent YTM) and closed at Rs99.45 (7.71 per cent YTM), almost at the same rate as Thursday's Rs99.44 (7.72 per cent YTM).

Call rates: Call rates were between 6.00 and 6.10 per cent.

Reverse reppo: In the first three-day reverse repo auction under LAF, Reserve Bank of India received and accepted 24 bids amounting to Rs24,800 crore and in the second three-day reverse repo auction, 51 bids for Rs23,555 crore. There were no repo bids.

CBLO: The CBLO market saw 334 trades aggregating to Rs17,380.05 crore in the 4.00-5.89 per cent range.
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Forex reserves up $675 m
Mumbai: According to the Reserve Bank of India's Weekly Statistical Supplement, foreign exchange reserves rose by $675 million to touch $164.023 billion for the week-ended July 28. In the previous week, the reserves had increased by $689 million to $163.35 billion. Foreign currency assets increased by $673 million to touch $157.071 billion during the week. Foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-US currencies such as euro, sterling and yen. Gold reserves remained unchanged at $6.18 billion. The reserves position in the IMF increased by $2 million to touch $765 million.
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GIC incurs Rs650-cr loss from Mumbai floods
Mumbai: The General Insurance Corporation of India has estimated its gross losses arising out of the Mumbai flood last year at Rs2,900 crore.

GIC's loss due to floods was around Rs650 crore. The gross loss due to fire at the ONGC rig was around $355 million (Rs1,650 crore) and of this GIC's loss was around $18 million (Rs83 crore).

The net incurred claims during 2005-06 were higher at Rs4,573 crore compared to Rs3,702.80 crore.

During 2005-06 GIC had registered a 199 per cent growth in its net profit at Rs598 crore, against Rs200 crore the previous year.

GIC also declared a dividend of 20 per cent for the year 2005-06. The dividend cheque for Rs86 crore was presented to the finance minister recently.

The net earned premium during 2005-06 was marginally higher at Rs4,459 crore, against Rs4,373 crore in the previous year.
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Chidambaram defends advisory to banks on PLR
New Delhi: Finance Minister, P Chidambaram, has justified the move to `advise' public sector banks to consult their boards before revising lending rates, saying that "All that we have done is to advise banks to place before the board any decision on rates. The Government is a majority shareholder and there is a Government nominee on the boards of banks. What is wrong with the advice?"
Chidambaram felt that a number of aspects should be looked into after the RBI raised its reverse repo rate on July 25. He pointed out that the Government, as a majority shareholder in public sector banks, had a view on the issue of rates and had a right to be heard at the board on such matters. The Government nominees would convey the official viewpoint.

In its letter, the Finance Ministry had asked chiefs of public sector banks to keep the PLR hike in abeyance until their boards consider the matter.
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Banks may not rollback rate hikes
New Delhi: Bankers say that PSU banks that hiked interest rates without their respective Boards' nod last week are expected to obtain approval now, but none of them would rollback the hike.

Punjab National Bank, one of the few state-run banks that raised prime lending rate last week, on Friday said it had hiked rates only after obtaining permission of its Board, making it compliant with the Finance Ministry's directions in this regard.

Besides PNB, top state-controlled lenders like State Bank of India and Bank of Baroda have

raised Prime Lending Rate (PLR) by 0.25-0.5 per cent. PNB and Oriental Bank have also raised home loan rates by 0.25-1.0 per cent.

If PLR goes up, corporate loan rates and personal loan rates go up as they are linked to PLR. But, housing and car loan rates are priced independently at competitive rates to attract more customers as this segment is growing rapidly.

With cost of funds rising significantly after Reserve Bank raised short term rates by 0.5 per cent, many banks raised home and prime lending rates.
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Govt may soon be able to dissolve bank boards
New Delhi: The Government plans to table the Banking Services and Financial Institutions Law (Amendment) Bill in Parliament next week and the amendments in the Factories Act in the following week. The Banking Companies and Financial Institutions Law (Amendment) Bill seeks to empower the Government to dissolve the board of public sector banks with a rider. The earlier version allowed the suspension to be for three years, which is now brought down to six months. This was among the four pending banking reform bills, which were being opposed by the Left parties and trade unions.

But the Left parties and trade unions continue to oppose another major legislation - Banking Regulation (Amendment) Bill, that seeks to remove 10 per cent voting right cap for shareholders. The two other banking related Bills - the Payment and Settlement Systems Bill and the State Bank of India (subsidiary banks laws) amendment bill - are to be sent to the Parliamentary standing committee.
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