Rupee weakens slightly
Mumbai: The rupee weakened against the dollar, after closing flat for two days. The rupee opened weak at 46.54/55, in line with the yen against the dollar, touched an intra-day low of 46.55 and ended 46.53/54.
In the forwards, the six-month premium ended at 1.42 per cent (1.39 per cent) and the 12-month premium at 1.38 per cent (1.35 per cent).

Call rates: Call rates ended at 6-6.1 per cent, unchanged from the previous close.

Reverse repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted 23 bids amounting to Rs24,985 crore and in the second one-day repo auction, 35 bids for Rs21,785 crore. There were no repo bids.

CBLO: The CBLO market saw 301 trades aggregating Rs17,498.35 crore in the 5.8-5.91 per cent rate range.

Bonds: Bond prices rallied after the Finance Minister made statements about oil bonds not being accorded SLR (Statutory Liquidity Ratio) status. Dealers said, "If oil bonds are not given SLR status, it implies that banks will have more cash to invest in Government securities. This caused the ten-year paper to gain by around 20 paise.

G-secs: The 7.59-10 year-2016 paper opened at Rs97.90 (7.90 per cent YTM) and closed at Rs98 (7.89 per cent YTM), up from Wednesday's Rs97.81 (7.92 per cent YTM). The 8.07-11 year-2017 paper opened at Rs100.85 (7.95 per cent YTM) and ended at Rs100.98 (7.93 per cent YTM), against Rs100.68 (7.97 per cent YTM) on Monday.
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Commercial banks to adopt Basel II norms from Mar '07: RBI
Mumbai: Reserve Bank has said in its Annual Report for 2005-06 that all commercial banks will have to adopt Basel-II norms from March 2007.

Implementation of Basel II will require more capital for banks in India, due to the fact that operational risk is not covered under Basel I and the capital charge for market risk was not prescribed until recently.

"The cushion available in the system, which at present has a Capital to Risk Assets Ratio (CRAR) of over 12 per cent, provides some comfort but the banks are exploring various avenues for meeting the capital requirements under Basel II," the bank said.

In view of more capital requirement by banks, they were permitted to raise capital through new instruments like innovative perpetual debt (Tier I), debt capital instruments (upper Tier II), perpetual non-cumulative and redeemable cumulative preference shares (Tier I).
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SBI Cards gets second place, zooms past Citibank
New Delhi: SBI Cards has zoomed past Citibank to become the second largest credit card company in the country by issuing 2.92 million cards as on August 15.

SBI Cards, a joint venture between State Bank of India and GE Money-issues on an average 1.3 lakh credit cards every month and is growing by 60-70 per cent year-on-year. SBI Cards is expected to give a tough fight to ICICI Bank, which is at present the number one credit card issuer at over 5 million.

SBI Cards is now present in 107 locations compared to 45 locations 2-3 years ago.
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Oil bonds not to be given SLR status: Chidambaram
New Delhi: The Finance Minister, P Chidambaram said Rs28,300 crore worth of oil bonds to be issued to oil marketing companies will not get SLR status implying that these oil bonds will not compete with government securities.

Banks have to compulsorily maintain 25 per cent of their time and demand liabilities as statutory liquidity ratio (SLR) and one of the ways of fulfilling the obligation is to buy approved securities.

If oil bonds to be issued to oil companies are also given SLR status, then there is a possibility of banks investing in these bonds to fulfill their SLR requirements, thereby buying less government securities to that extent.

Chidambaram also said Rs9,000 crore borrowing programme for September will be carried out as per schedule.
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