Rupee gains marginally
Mumbai: The rupee gained marginally as the central bank bought dollars. The rupee opened at 44.65/66 and touched a high of 44.6350 before closing at 44.69/70 against the previous close of 44.72/73.

Forward premia were steady with the six-month closing at 1.81 per cent (1.79 per cent) and the one-year closing at 1.7 per cent (1.72 per cent).

Bond: Bond prices jumped by almost 20 paise. Total traded volumes on the order matching system also increased to Rs8,305 crore (Rs6,155 crore).

G-secs: The 7.59 per cent 10-year 2016 paper opened at Rs 99.90 (7.60 per cent YTM) and closed at Rs 100.01 (7.58 per cent YTM) against Rs 99.82 (7.61 per cent YTM) on Tuesday. The 8.07 per cent 11-year 2017 paper opened at Rs 103.21 (7.61 per cent YTM) and closed at Rs 103.45 (7.57 per cent YTM) against Tuesday's Rs 103.19 (7.61 per cent YTM).

Call rates: Call rates eased to 6.7-6.8 per cent (6.9-7 per cent) as liquidity improved from around Rs 8,000 crore to over Rs 10,000 crore on Wednesday.

Reverse repo: In the first one-day reverse repo auction under LAF, the RBI received five bids for Rs 1,900 crore. There were no repo bids.

CBLO: The CBLO market saw 376 trades aggregating Rs 20,335.35 crore in the 6.12-6.4 per cent range.
Back to News Review index page  

Bank of India, Union Bank in lending alliance tie-up with IDFC
Mumbai: Bank of India and Union Bank have tied up with infrastructure financial services provider Infrastructure Development Finance Company Ltd (IDFC) for loan syndication.

Under the arrangement with IDFC, both banks will facilitate joint identification, marketing, appraisal and underwriting of project finance. This will provide a single point contact for the borrowers.

The two banks have set a target of Rs11,500 crore for projects in the next 4-5 months and hope to handle 60 projects worth
Rs45,000 crore in the next one year. The two banks will also work together globally to offer cash management services and in training.
Back to News Review index page  

Sompo enters insurance venture
Kolkata: Allahabad Bank, Indian Overseas Bank, Karnataka Bank, Dabur and Sompo Japan Insurance executed a shareholders' agreement for the formation of a non-life joint venture insurance company.

The company will be called Universal Sompo General Insurance Co. Allahabad Bank will hold 30 per cent in the venture, while IOB and Karnataka Bank will own 19 per cent and 15 per cent, respectively.

Dabur Investment Corporation will hold 10 per cent, while the Japanese partner will hold 26 per cent, a press release issued here said.
Back to News Review index page  

Rs 50,000 crore more loans sanctioned for priority sector
Mumbai: The banking system's priority sector lending will soon increase by over Rs 50,000 crore. The Reserve Bank of India (RBI) has also suggested expanding the base for calculating the level of directed lending.

So far, a bank's exposure to the priority sector — agriculture, small scale industries, small businesses, micro-credit, education loans and housing loans up to Rs 15 lakh — is capped at 40 per cent of its net credit.

In its revised draft guidelines issued today, the RBI added repatriable as well as non-repatriable foreign currency deposits by non-residents and banks' investments in non-SLR bonds categorised as held to maturity to net bank credit, enlarging the base on which priority sector lending targets are set.

The guidelines say the basis for calculation of the priority sector lending obligation will be either net bank credit or credit equivalent of off-balance sheet items, whichever is higher. Indian banks will be required to lend to the priority sector up to 40 per cent of their adjusted net bank credit or credit equivalent of off-balance sheet exposures, whichever is higher. For foreign banks, the target is 32 per cent.

The off-balance sheet items include letters of credit and derivatives transactions. This provision will affect foreign banks that have negligible direct credit exposure but huge off-balance sheet exposure.
Back to News Review index page