Retail credit slows
Retail credit growth is seen to be slowing down. However despite this the RBI is keeping strict vigil on the movement. Deputy Governor Rakesh Mohan speaking at the global banking conference organised by the Federation of Indian Chambers of Commerce and Industry and the Indian Banks Association said, "Retail credit has grown by 47 per cent, but we need to keep an eye on that."

In May this year, retail lending by banks rose by 74 per cent year on year, driven by a 115.5 per cent increase in housing loans in the first two months of 2006.

The slowdown follows the RBI decision to hike the capital requirement for home loans and other personal loans as well as a rise in interest rates.

Retail credit expanded between 22 per cent and 41 per cent since 2001-02 and accounted for 26.7 per cent of the incremental non-food credit in the banking system in 2005-06. The share of advances to individuals increased from about 10 per cent of total bank credit in March 2002 to nearly 25 per cent in January 2006.
Since 1991, the share of retail loans in the banking system's overall loan portfolio jumped from 6.4 per cent to 22 per cent.

The deputy governor said banks had nearly exhausted the leeway provided by excess statutory liquidity ratio investments and that there could not be credit growth at the current pace without a matching increase in resources.
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NIIT, ICICI Bank to provide finance training
Bangalore: NIIT plans to provide training for the financial services sector with the launch of the Institute of Finance, Banking and Insurance (IFBI) in partnership with ICICI Bank. IFBI plans to cater to the needs of the domestic and overseas markets BFSI market.

IFBI will commence admissions this October and its first course - a six-month full-time programme, the Post-Graduate Diploma in Banking Operations (PGDBO), will focus on grooming entry-level professionals for the banking industry. ICICI Bank has offered to recruit all students of the first batch as Officers upon successful completion of the programme.

The Banking industry currently employs nine lakh people and is expected to grow this number to 15 lakh over the next five years. This translates into an additional requirement of six lakh professionals with skill sets in this segment. To start with, IFBI will offer training programmes for the entry-level professionals in the banking sector.
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No moratorium on co-op banks says RBI
Mumbai: At a hurriedly convened press meet Maharashtra commissioner for co-operation Anil Diggikar said despite some cases of mismanagement, the performance of the co-operative banking sector is satisfactory and there is no need for panic among the depositors.

Diggikar clarified that there was no move from the Reserve Bank of India to impose a moratorium on a substantial number of co-operative banks in the state.

The city witnessed a near panic situation as depositors rushed to co-operative bank branches to withdraw deposits in reaction to a news bulletin aired by the All India Radio on Monday morning which quoted Union Agriculture Minister Sharad Pawar as saying the RBI had imposed a moratorium on 100 co-operative banks in the state.
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Banks told to cut charges on NRI remittances
Mumbai: A report of a working group constituted by the RBI has said banks should bring down the cost of NRI remittances by trimming their charges. To reduce costs, the working group recommends that NRIs, wherever possible, should try and route their remittances through a branch of an Indian bank or a foreign bank having a branch in India.

There is currently an RBI cap on the number of exchange house relationships an Indian bank can enter into. Since, this is a low-cost channel, the group has recommended that the limit be relaxed or even done away with. According to the group, Indian banks should be allowed to enter the Money Transfer Operators business abroad. Banks have been advised to extend the scope of existing electronic transfer facilities like the Real Time Gross Settlement and also set up Centralised Remittance Receiving Centres.

Currently for a remittance of $1,000, from a major financial centre to a bank in India the overall cost could be in the 2 to 3 per cent range, which will drop with the size of the remittances.
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Rupee gains
Mumbai: The rupee gained slightly and touched 46 during day trade. The rupee opened at around 45.99 and touched 46 on dollar buying. However, it recovered to end at 45.92/93, against the previous close of 45.95. The dollar was weak against the yen, but strong against the euro and pound, a dealer said.

Forwards: The six-month premium closed at 1.3 per cent (1.25 per cent) and the one-year closed at 1.31 per cent (1.29 per cent).

Bonds: Bond prices rose by 35 paise reacting to the RBI announcement of the auction calendar for Government securities. Dealers see a positive in the auctions being evenly spread over the rest of the fiscal.

G-secs: The 7.59 per cent 10-year 2016 paper opened and closed at Rs100.15 (7.57 per cent YTM), up from Monday's Rs99.78 (7.62 per cent YTM).The 8.07 per cent 11-year 2017 paper opened at Rs103.05 (7.63 per cent YTM) and closed at Rs103.15 (7.62 per cent YTM), against Monday's Rs102.78 (7.67 per cent YTM).

Call rates: Call closed at 6.40 per cent (6.40-6.50).

Reverse repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted 4 bids amounting to Rs5,640 crore and in the second one-day reverse repo auction, 16 bids for Rs9,880 crore.

CBLO: The CBLO market saw 403 trades aggregating to Rs21,049.85 crore in the 5.80-6.20 per cent range.
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RBI may extend Basel II deadline: Leeladhar
Mumbai: The Reserve Bank of India may extend the deadline for banks to comply with Basel II norms, which would be finalised in a couple of weeks, said V. Leeladhar, deputy governor, RBI.
Leeladhar said: "We are monitoring the preparedness of banks. There may be a marginal extension of the date for complying with the guidelines. The RBI has set March 31, 2007, as the cut-off date to fall in line with Basel II norms."

The RBI has set up a `Steering Committee' comprising representatives from 14 private, public sector, foreign banks and the Indian Banks' Association which has examined the Basel II framework and passed its recommendations to the RBI.
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