Rupee gains
Mumbai: The rupee gained 11 paise against the dollar on US interest rates after the US Fed left interest rates unchanged. The rupee opened at around 45.3150 and weakened intra day to 45.33/34 levels as some foreign banks were seen buying dollars, said a dealer at a private bank.

Later in the day, the rupee recovered on dollar selling to finally close at 45.26 against 45.37 on Monday.

In forwards, the six-month remained unchanged at 1.64 per cent and the 12-month ended at 1.55 per cent (1.54 per cent).

Bonds: Bond prices moved up 16 paise on Fed holding to interest rates. Total traded volumes on the order matching system increased to Rs2345 crore (Rs1610 crore).

Dealers said the market take a direction only after the Credit Policy.

G-secs: The 7.59 per cent, 10-year, 2016 benchmark paper opened at Rs99.65 (7.64 per cent YTM) and closed at Rs99.70 (7.63 per cent YTM) against the previous close of Rs99.54 (7.66 per cent YTM). The 9.39, five-year, 2011 paper opened at Rs107.75 (7.39 per cent YTM) and closed at Rs107.74 (7.40 per cent YTM) against the previous close of Rs107.58 (7.43 per cent YTM).

Call rates: Call rates ruled between 7 per cent and 7.10 per cent against 7.10-7.20 per cent.

Reverse repo: In the first one-day repo auction under LAF, the Reserve Bank of India received and accepted onebid amounting to Rs10 crore.

In the reverse repo auction, there were no bids. In the second one-day reverse repo auction, the RBI accepted and received 18 bids for Rs16,335 crore.

CBLO: The CBLO market saw 385 trades aggregating to Rs20,835.20 crore in the 2-7.10 per cent range.
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IIFC, IL&FS enter into pact
New Delhi: India Infrastructure Finance Company of India (IIFC) has entered into an agreement with Infrastructure Leasing & Financial Services Ltd (IL&FS) to appraise and mobilise resources for infrastructure projects on a public private partnership (PPP) basis, a release from the company stated.

IIFC expects to support other institutions on a similar basis as part of its on-going efforts to develop the necessary institutional capacities to develop the country's infrastructure, it added. Since inception in January, IIFC has sanctioned over Rs5,000 crore of debt funding to the infrastructure sector either directly to infrastructure projects or through innovative financing arrangements to support the participation of banks and financial institutions in infrastructure projects. The sectors currently being actively supported by the IIFC include power, ports, airports, urban infrastructure, water and tourism.
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ICICI Bank ties up with car rental company Sixt
New Delhi: ICICI Bank said it expects over 40 per cent growth in its vehicle finance business at Rs50,000 crore by March 2007 from Rs34,000 crore as of March this year.

The book value of the auto loan portfolio was at Rs42,000 crore as of September 2006. The bank's vehicle loan disbursement stood at Rs20,000 crore in 2005-06, while the incremental loan disbursement is expected to be Rs29,000 crore this fiscal year.

ICICI Bank has tied up with Sixt India, a car leasing and renting service provider, for car leasing business in India.

Under the arrangement, the bank will finance 100 per cent value of cars bought by Sixt which in turn will lease the cars out to corporates for a certain period at a price of 60-80 per cent of the cost.

Sixt India plans to have a fleet of 3,000 cars by 2007 and 35,000 cars in five years.
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Banking tie-up may share payment modes
Mumbai: The Oriental Bank of Commerce, Indian Bank and Corporation Bank alliance is looking to share payment modes and launch a joint credit card.

The payment sharing means that to begin with, cheques and drafts of the three partners would be accepted in select branches of other banks and help extend reach.

The alliance is also looking to launch a common credit card with a credit card company. Of the three only Indian Bank has a credit card.

The technical integration of the ATMs of the three banks is also complete.
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Corpn Bank net up 20 pc
Mumbai: Corporation Bank's net profit has increased 20 per cent on a rise in interest income to touch Rs127.01 crore (Rs105.6 crore) for the second quarter ended September 30. The bank trimmed bad assets with the percentage of net Non Performing (NPAs) assets to total assets improving to 0.48 per cent (0.98 per cent). Provisions, too, were lower at Rs38.65 crore (Rs96.01 crore). The bank saw a cash recovery and upgradation of NPAs of Rs135 crore (Rs93 crore).

However the bank's other income fell due to lower fee income and a drop in treasury income. The bank will try to reposition its cash management products, add new features and enter new geographies. Corporation Bank has set a growth target for fee income at 20 per cent by the end of this year.

Yield on advances moved up to 8.69 per cent (8.3 per cent) while cost of deposits rose to 5.02 per cent (4.54 per cent). This includes the interest payout on the Rs300 crore tier II capital raised in March 2006.
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Andhra Bank Q2 net up to Rs146.4-cr
Hyderabad: Andhra Bank's net profit rose 14.47 per cent to touch Rs56,113 crore during the second quarter of current fiscal ended September 2006, translating into a growth of over Rs49,021 crore in the corresponding quarter of previous fiscal.

While gross bank credit has improved by 23.22 per cent to reach Rs23,600 crore from Rs19,152 crore, the total deposits could grow only by 8.85 per cent to Rs32,513 crore (Rs29,869 crore). The bank said its deposit growth has slowed down due to the fact that it discouraged bulk deposits and focussed more on retail deposits to reduce cost of deposits and improve net interest margin. As a result, it could register a growth of 20.71 per cent in its low-cost deposits at Rs12,941 crore from Rs10,721 crore in the corresponding quarter of previous fiscal. For the quarter under review, the bank posted an interest income of Rs772.09 crore (Rs635.31 crore), a growth of 21.52 per cent, total income of Rs900.75 crore (Rs753.23 crore), up by 19.58 per cent, operating profit of Rs223.09 crore (Rs200.51 crore), an increase of 11.26 per cent, while net profit rose 10.19 per cent to Rs146.44 crore (Rs132.89 crore).

For the first half of current fiscal, Andhra Bank reported a net profit of Rs262.85 crore (Rs218.06 crore), registering a growth of 20.54 per cent, while total income has grown up by 21.75 per cent to Rs1,762.49 crore (Rs1,447.66 crore).
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Capgemini acquires Kanbay for $1.25bn
Mumbai: French company Capgemini which is into infotech consulting, has acquired US-based Kanbay International for $1.25 billion. The company plans to accelerate its growth in India and improve its position in finance consulting in North America. In India the company is targeting to employ 35,000 Indian employees by 2010, and a growth of 32 per cent per annum. Capgemini has 67,000 employees worldwide.

The company recently bought a 51 per cent stake in the business process outsourcing unit Unilever India Shares Services Ltd.

Capgemini is to pay $29 per share in cash, representing a premium of 15.9 per cent to Kanbay's closing share price on October 25 and roughly three times Kanbay's 2006 revenue.

The company says it could fully finance the Kanbay deal with its cash resources but added it would not rule out raising up to Euro 500 million in equity to fund further possible acquisitions.

The acquisition will make it the largest non-Indian infotech employer (excluding BPO employees) in India, ahead of IBM and Accenture (which otherwise have over 45,000 employees overall) in percentage terms.

The combined entity, Capgemini and Kanbay, with a full-time employee count of 12,000 in infotech is the largest at 16 per cent, followed by IBM at 11 per cent (20,000) and Accenture at 11 per cent (12,500).

At present, Capgemini's employee count stands at 6,000 in infotech and 600 in BPO. After the merger, this will increase to 12,000 in infotech by the end of the year. However, the BPO headcount would continue to be 600 till the end of this year, Rao said.
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RBI may defer implementation of Basel II norms
Mumbai: The Reserve Bank of India (RBI) may defer the deadline for implementation of revised capital adequacy guidelines (popularly known as Basel II) by six months to a year. The RBI may also prefer a phased implementation of the Basel norms starting with foreign banks and internationally active Indian banks and then gradually moving to other banks.

Banking sources said empanelment of rating agencies is understood to be a big hurdle in going ahead with Basel II norms as the current credit rating capacity is not enough to cover all loan accounts of banks. Banks would be required to have their loan accounts rated by rating agencies under Basel II for allocation of capital according to the perceived level of risk.

The RBI is also proposing a cut-off whereby banks need not get ratings for loans below certain amounts and allocate capital for such loans as prescribed for unrated exposure. The RBI also has to work out a standardised structure for rating agencies.

Under the standardised risk, banks have to follow ratings assigned by external agencies. Apart from credit risk, Basel II prescribes enhanced capital allocation for market risks and operational risk.
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