Rupee strengthens against dollar
Mumbai: The rupee continued to gain against the US dollar on Thursday, mainly due to FII inflows into the domestic equity markets.

The currency opened at 46.51/52 and touched an intra-day of 46.43 due to dollar selling by exporters. It closed the day at 46.44/45, around 12 paise higher than the previous close of 46.57/58.

Forwards: In the forward-premia market, the six-month premium ended at 1.38 per cent (1.33 per cent) and the 12-month premium ended at 1.33 per cent (1.33 per cent).

Bonds: Bond prices rallied by around 50 paise on the back of the gains made by the US treasury bills.

G-secs: The 7.59 per cent-10 year-2016 paper opened at Rs96.90 (8.05 per cent YTM) and closed at Rs97.15 (8.02 per cent YTM), against Wednesday's Rs96.66 (8.09 per cent YTM). The 9.39 per cent-5 year-2011 paper opened at Rs107.03 and closed at Rs107.11 (7.63 per cent YTM), against Rs107.12(7.61 per cent YTM), against Wednesday's close at Rs108.80 (7.69 per cent YTM).

Call rates: Call rates remain unchanged between 6 per cent and 6.10 per cent.

Reverse repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted 17 bids amounting to Rs14,120 crore and in the second one-day reverse repo auction, 31 bids for Rs20,225 crore. There were no repo bids.

CBLO: The CBLO market saw 255 trades aggregating to Rs14,289.55 crore in the 5.98-6.14 per cent range.
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SBI, ICICI to get full banking status in Singapore
Mumbai: The Monetary Authority of Singapore (MAS) is willing to offer State Bank of India and ICICI Bank the status of qualifying full bank (QFB). With this the two Indian banks can raise retail deposits and operate at 25 centres in Singapore.

Even though the Comprehensive Economic Co-operation Agreement (CECA) signed last year between India and Singapore outlined that three Singapore banks would be allowed to open 15 branches in India, and three Indian banks given QFB status, no progress had been made till now.

Indian banks were not able to kick off full-fledged banking activities in Singapore, as MAS had been insisting on ratings as a precondition for offering QFB status to Indian banks. The RBI, too, did not appear very eager to allow Singapore banks to open more branches in the country.
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Govt mulling curbs on FDI in financial areas
Mumbai: The Reserve Bank of India has told the government that it is not in favour of foreign direct investment (FDI) coming into the financial sector through the automatic route.

The present policy provides for 100 per cent FDI through the automatic route, subject to minimum capitalisation norms for non-banking finance companies (NBFCs) and other approved activities, such as merchant banking, underwriting portfolio management, asset management, venture capital, financial consultancy, stock broking, credit reference agency, credit rating, leasing and finance, forex broking, money-changing business, housing finance, custodial services and micro and rural credit.
Under the automatic FDI route, overseas investors who are eligible and fulfil certain norms can invest directly in a local firm or set up a new company in specified sectors, including financial services. Subsequently, they have to report to the RBI, which approves such proposals ex post-facto.

RBI now says that a proper due diligence and assessment of the entities investing in the financial sector is warranted before granting approval. It says this is in the interests of financial stability and is in view of the impact a collapse of any large entity would have on the financial sector. Thus it will not be desirable to allow automatic entry for overseas investors.
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SBI wants ICAI to defer accounting code
New Delhi: State Bank of India wants the application of the revised accounting standard on employee benefits to be deferred in the wake of its impact on its balance sheet.

The revised accounting standard on employee benefits (AS-15) is mandatory on certain large enterprises such as SBI and has come into force from the accounting period beginning April 1, 2006.

The Institute of Chartered Accountants of India (ICAI) President, T.N. Manoharan, said the SBI is having transitional problems. As the central council had approved the revised AS-15, it would have to again consider the matter on account of SBI's request. He maintained that the revised AS-15 was in line with the internationally recognised accounting standards on employee benefits. Accountancy experts said that many enterprises would face transitional problems to the new standard as in most cases it would result in higher provisions for retirement and other employee benefits. The revised AS-15 has stringent requirements concerning measurement of employee benefits costs. It has also specified the projected unit credit method as the only single actuarial method of valuation that would be recognised. Moreover, the revised AS-15 has also stipulated that the discount rate to discount benefit obligations should be consistent with market yields of Government bonds.
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Enam enters insurance broking
Mumbai: Enam Financials Consultants has ventured into the insurance broking business through Enam Insurance Broker Pvt Ltd which will offer insurance products to corporates and individuals in the life and the non-life insurance segments.

Dr Dadia, director, Enam Insurance Broker Pvt Ltd said the concept of insurance broking is still at a nascent stage in India. Given the low levels of insurance penetration across categories, there is a huge potential for corporates as insurance brokers, he said.
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