Rupee gains
Mumbai: The rupee gained 13 paise against the dollar on Thursday as foreign banks sold dollars. The rupee opened at 44.80/82, traded between 44.82 and 44.84 levels, to finally close at 44.65 against the previous close of 44.78 on Wednesday.

In forwards, the six-month closed at 3.08 per cent (2.76 per cent) and the 12-month ended at 2.63 per cent (2.46 per cent).

Bonds: The bond market was bearish due to high US yields and tight liquidity, with prices falling by about 22 paise.

G-secs: The 7.59 per cent 10-year 2016 paper opened at Rs99.35 (7.69 per cent YTM) and closed at Rs99.44 (7.67 per cent YTM) against the previous close of Rs99.66 (7.64 per cent YTM).

The 8.07 per cent 11-year 2017 paper opened at Rs102.35 and closed at Rs102.63 (7.69 per cent YTM) against Wednesday's close of Rs102.85 (7.66 per cent).

Call rates: The call rate closed at 7.90-8 per cent (7.8-7.9 per cent).

Reverse repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted three bids for Rs125 crore. In the first one-day repo auction, it received and accepted 16 bids for Rs5,740 crore. In the second one-day reverse repo auction, the apex bank accepted and received seven bids for Rs4,735 crore, and one bid for Rs 100 crore in the second one-day repo auction.

CBLO: The CBLO market saw 408 trades aggregating to Rs23,405.3 crore in the 6.9-7.5 per cent range.
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Bank loans expected to grow at 25 pc
Mumbai: ICICI Bank, which raised its lending rates by almost 50 basis points, following the hike in cash reserve ratio, expects a 25 per cent growth rate in loans for the banking industry this fiscal, said V. Vaidyanathan, executive director, ICICI Bank.

"With inflation and money supply touching the upper scales and bulk deposits getting costly, cost of funds has to be eventually passed on to lenders," he said.
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Reserve Bank monitoring inflation, liquidity
New Delhi: Rakesh Mohan, deputy governor of Reserve Bank of India (RBI), has said the central bank is monitoring liquidity, inflation and credit growth to see if more steps are required to tighten monetary conditions.

RBI has recently increased the cash reserve ratio (the percentage of deposits that banks must park with it) to 5.5 per cent to absorb the Rs13,500 crore from the system as part of its measures to check rising prices and sustain the growth momentum.
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SBI holding in associates at 51 per cent
New Delhi: The proposed legislative amendment to reduce State Bank of India's shareholding (statutory minimum) in its subsidiary banks from the current 55 per cent to 51 per cent has been endorsed by the Standing Committee on Finance.

In its report on the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2006, the Standing Committee noted that the proposed legislative changes would enable the subsidiary banks to raise capital through preferential allotment or private placement.

It would also enable them to issue preference shares in line with the guidelines framed by the Reserve Bank of India (RBI). As per the existing provisions, the subsidiary banks can raise capital only through public issue of equity shares.

The proposed reduction of SBI's shareholding from 55 per cent to 51 per cent is aimed at providing more headroom to the subsidiary banks to raise capital from the market without the necessity for infusion of capital by SBI and also without diluting their public sector character.

The Committee noted that the proposal to reduce the minimum shareholding of SBI in subsidiary banks to 51 per cent would place these banks at par with the nationalised banks, where the Government's minimum shareholding has been pegged at 51 per cent.

Four subsidiary banks of SBI -- State Bank of Bikaner & Jaipur, State Bank of Indore, State Bank of Mysore and State Bank of Travancore - are listed on the stock exchanges.
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