Rupee gains
Mumbai: The rupee strengthened by about 10 paise on strong dollar inflows. Most market participants unwound their positions ahead of the weekend, aiding the rupee. The rupee opened at 44.71/72 and closed at 44.60/62 against the earlier close of 44.71/72. The dollar gained against overseas currencies, as most markets were not active before the Christmas holidays.

In forwards, the six-month premium closed at 3.26 per cent (3.17 per cent) and the one-year closed at 2.77 per cent (2.67 per cent).

Bonds: Bond prices fell by around 12 paise (yields rose by almost one basis point) on tight liquidity.

G-secs: The 7.59 per cent -10 year-2016 paper opened at Rs100.04 (7.58 per cent YTM) and closed at Rs99.90 (7.60 per cent YTM) against Rs100.02 (7.59 per cent YTM) on Wednesday.

The 8.07 per cent -11 year-2017 paper opened at Rs103.37 (7.58 per cent YTM) and ended at Rs103.28 (7.59 per cent) against Wednesday's Rs103.35 (7.59 per cent).
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HDFC Bank hikes prime lending rate to 13.5 pc
Mumbai: HDFC Bank has increased its benchmark prime lending rate by 1.5 percentage point cent to 13.5 per cent effective December 20. The bank last raised its PLR in June. The bank also raised deposit rates by 50-75 basis points across various maturities over the last month. Only a small proportion of HDFC Bank's loans are linked to the PLR.
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Central Bank to distribute Tata Mutual's products
Mumbai: Tata Mutual Fund has signed a marketing agreement with Central Bank of India (CBI) for distributing its mutual funds. Initially, CBI will distribute various schemes of Tata Mutual Fund through 300 branches across the country. The branches selling the funds will be mostly in the metros and few urban areas.
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IDBI, LIC signs co-finance pact to fund infrastructure projects
Mumbai: IDBI has signed an agreement with LIC for joint and take-out financing.

Under the agreement, LIC will get the first chance to reject any long-term project that IDBI takes up. IDBI could finance the first five years and LIC the remaining 10 years for a 15-year project. Or, the repayment could be structured so that in the first five years, 70 per cent of IDBI's loan and 30 per cent of LIC's loan are repaid and vice-versa in the remaining period, said a senior IDBI official.

IDBI is one of the lenders in several big-ticket infrastructure projects such as the Rs5,000-crore Mumbai economic zone. It is also the lead arranger for the Mumbai airport upgradation project, which has a debt component of Rs5,200 crore.

Some of the projects in the pipeline are the Metro Rail project and the Trans Harbour project, said the official.

LIC has, on a cumulative basis, pumped over Rs3,67,000 crore in infrastructure development in the current year, while in the last financial year it was Rs13,832 crore.
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Three banks tie up for life insurance venture
New Delhi: Three banks, Bank of India (BoI), Union Bank of India (UBI) and Dai-Ichi Mutual Life Insurance Co have forged an alliance to form a new life insurance joint venture company. Bank of India would hold 51 per cent stake in the three-way life insurance venture, while Dai-Ichi Mutual Life Insurance of Japan and UBI would hold 26 per cent and 23 per cent, respectively, in the company that is as yet unnamed.

Dai-Ichi Life is the second largest insurer in Japan and the sixth largest in the world. The company is the first life insurance entity from Japan to enter India.
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Margadarsi probe ordered
Hyderabad: The Andhra Pradesh Government has appointed former Chairman of the Insurance Regulatory Development Authority (IRDA), N. Rangachary, to examine the affairs of Margadarsi Financiers. The State Government has also made Krishnam Raju, Inspector General of Police, CID, the Authorised Officer, under Sections 45(T) and 58(E) of Reserve Bank of India Act, 1934. Rangachary at present the financial advisor to the State Government, will submit a report on whether Margadarsi Financiers, run by the media baron, Ramoji Rao, raised deposits from the public in violation of the provisions of the RBI Act or the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999.
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ICICI Bank to borrow $1bn yen from overseas banks
Mumbai: ICICI Bank will borrow $1 billion yen equivalent in three tranches under its loan syndication agreement in Geneva on December 20. According to a release from the bank twenty-six banks participated in the syndication facility, which is the widest participation for any Indian bank syndication in international markets. ICICI Bank concluded this transaction in one month from the date the mandate was awarded the release said.

The facility is split into three tranches: $350-million 364-day tranche, $450-million two-year tranche and a $200-million three-year tranche. The $1-billion syndication is a benchmark deal as this facility marks the largest syndicated loan for an Indian bank borrower. ICICI Bank has raised around $2 billion (including the current loan syndication) overseas till now.
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