Rupee gains slightly
Mumbai: The rupee had gained eight paise by the end of the trading on Thursday. The currency opened at 44.42 but due to sustained dollar selling, the rupee gained to close at 44.27/28 against Wednesday's close of 44.35/36.

Forwards: Forward premia moved up, with the 6-month closing at 3.78 per cent (3.62 per cent) and the 12-month ending at 3.07 per cent (2.94 per cent).

Bonds: Bond prices fell by about 26 paise as cautious trends prevailed before the Rs9,000-crore auction of government securities by January 12.

Dealers expect 6the second CRR hike (effective Saturday) to out Rs6,750 crore from the banking system, affecting liquidity. Total traded volumes on NDS-order matching system were lower at Rs2,335 crore (Rs3,580 crore).

G-secs: The 8.07 per cent 10-year 2017 benchmark paper opened at Rs103.78 (7.53 per cent YTM) and closed at Rs103.45 (7.57 per cent YTM) against Wednesday's Rs103.71 (7.54 per cent YTM).

The 7.59 per cent nine-year 2016 opened at Rs100.33 (7.54 per cent YTM) and closed at Rs100.07 (7.58 per cent YTM) against Rs100.29 (7.54 per cent YTM) on Wednesday.

Call rates: Call ruled at 6.5-6.7 per cent against 6.25-6.75 per cent on Wednesday.

Reverse repo: In the first one-day reverse-repo auction under LAF, the RBI did not receive any bid and in the first one-day repo auction, it received and accepted four bids for Rs1,010 crore. In the second one-day reverse-repo auction, the RBI accepted and received 26 bids for Rs10,915 crore and in the second one-day repo auction, it received and accepted one bid for Rs70 crore.

The CBLO market saw 351 trades aggregating Rs16,245.15 crore in the 5.87-6.17 per cent range.
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More banks raise NRE, FCNR rates
ICICI Bank, Andhra Bank, Union Bank, Dena Bank, Karnataka Bank, Federal Bank, Canara Bank, Punjab National Bank and State Bank of Travancore have hiked interest rates on NRE fixed deposits and FCNR deposits with effect from January 1.

ICICI Bank has hiked its interest rates on NRE fixed deposits and FCNR deposits. On NRE NRE deposits the rates have gone up by up to 19 basis points across various maturities, said a press release by the bank.

The rates on deposits with maturity of 18 months and above but less than 24 months and 24 months and above but less than 36 months is at 6.33 per cent per annum (6.12 per cent) and 6.16 per cent per annum (6 per cent) respectively. Interest rates on one-year FCNR deposits denominated in dollars have been increased to 5.33 per cent per annum.

Union Bank of India and Dena Bank have increased the interest rates on NRE term deposits and FCNR deposits across various maturities. The rates on NRE deposits with maturity of one year to less than two years and two years to less than three years is now at 6.33 per cent per annum (6.24 per cent) and 6.16 per cent per annum (6 per cent) respectively. Interest rates on one-year to less than two years FCNR deposits denominated in US dollars have been raised to 5.33 per cent per annum (5.24 per cent).

Andhra Bank has revised rates of interest of Non-Resident (External) rupee accounts (NRE Accounts) term deposits from January 1. With this revision, the interest rates offered on NRE term deposits of different maturity are: I year to less than 2 years... ... 6.33 per cent (6.24 per cent) 2 years to less than 3 years--6.16 per cent (6 per cent), 3 years and above--6.08 per cent (5.91 per cent).

The revised interest rates are applicable to all fresh deposits and renewals of the existing ones with effect from January 1, a bank press release said.

Karnataka Bank Ltd has increased interest rates on its NRE and FCNR (B) deposit schemes with effect from January 1.A bank release said here that the interest rate on NRE deposits has been revised to 6.33 per cent (6.24 per cent) for tenure of one year to less than two years, 6.16 per cent (6 per cent) for two to less than three years, and 6.08 per cent (5.91 per cent) for three to five years.

For FCNR (B) deposits, the interest rate on dollar deposits for tenure of one year to less than two years is 5.33 per cent (5.24 per cent), two to less than three years is 5.16 per cent (5 per cent), three to less than four years is 5.08 per cent (4.91 per cent), four to less than five years is 5.07 per cent (4.89 per cent), and five years only it is 5.09 per cent (4.90 per cent).

Federal Bank has raised the interest rates for NRE and FCNR deposits with effect from January 1. For NRE deposits of one-to-two year maturity, the rates have been revised to 6.33 per cent (6.24 per cent), for two-to-three years it is 6.16 per cent (6 per cent) and for three years and above it is 6.08 per cent (5.91 per cent).

The FCNR dollar deposits with one-to-two year maturity have been raised to 5.33 per cent (5.24 per cent), two-to-three years to 5.16 per cent (5 per cent), three-to-four years to 5.08 per cent (4.91 per cent) and five years and above to 5.09 per cent (4.90 per cent).

The FCNR British pound of one-to-two year maturity has been revised to 5.58 per cent (5.43 per cent), two-to-three years to 5.53 per cent (5.36 per cent), three-to-four years to 5.51 per cent (5.32 per cent) and above five years to 5.41 per cent (5.22 per cent), a press release from the bank said.

Canara Bank has revised upwardly interest rates applicable for NRE (Rupee) and FNCR (B) deposits for various maturities with effect from January 1. For NRE (Rupee) deposits, the new rates will be 6.33 per cent (6.24 per cent existing) for a period of one year and above but less than two years; 6.16 per cent (6.00 per cent) for a period of two years and above but less than three years; and 6.08 per cent (5.91 per cent) for a period of three years.

Dollar deposits will attract 5.33 per cent (one year and above but less than two years); 5.16 per cent (two years and above but less than three years); 5.08 per cent (three years and above but less than four years); 5.07 per cent (four years and above but less than five years); and 5.09 per cent (five years only).

These will be 5.58 per cent, 5.53 per cent, 5.51 per cent, 5.47 per cent and 5.41 per cent respectively for Pound Sterling; and 4.02 per cent, 4.12 per cent, 4.13 per cent, 4.11 per cent and 4.12 per cent for Euro. RFC deposits will attract 5.33 per cent (one year and above but less than two years); 5.16 per cent (two years and above but less than three years); and 5.08 per cent (three years only) for Dollar; 5.58 per cent, 5.53 per cent and 5.51 per cent for Pound Sterling; and 4.02 per cent, 4.12 per cent and 4.13 per cent for Euro.

Punjab National Bank (PNB) has raised the interest rate on foreign currency non-resident (banks) deposits scheme for US dollar, British pounds, Euro, Australian dollar and Canadian dollar deposits with effect from January 1 this year.

It has also raised the interest rates on non-resident external (NRE) term deposits to 6.33 per cent for maturities of 1 year to less than 2 year, 6.16 per cent for maturities of two years to less than three years and 6.08 per cent for maturities of three to five years.

A PNB release said that interest rate on US dollar deposits under the FCNR (B) deposits scheme has been revised to 5.33 per cent for maturity of 1 year to less than 2 years (1st maturity), 5.16 per cent for 2 years to less than 3 years (2nd maturity), 5.08 per cent for three years to less than 4 years (3rd maturity), 5.07 per cent for 4 years to less than 5 years (4th maturity) and 5.09 per cent for five years (5th maturity).

The interest rate on GBP deposits has been revised to 5.58 per cent for 1st maturity, 5.53 per cent for 2nd maturity, 5.51 per cent for 3rd maturity, 5.47 per cent for 4th and 5.41 per cent for 5th maturity. The interest rate on Euro deposits has been revised to 4.02 per cent for 1st maturity, 4.12 per cent for 2nd maturity, 4.13 per cent per cent for 3rd maturity, 4.11 per cent for 4th maturity and 4.12 per cent for the 5th maturity.
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Realty valuations must be based on board norms
Mumbai: The Reserve Bank of India (RBI) has asked banks to have board-approved policies for valuation of properties, as its accuracy has implications for computation of capital adequacy ratio (CAR).

RBI said the issue of correct and realistic valuation of fixed assets owned by banks and that accepted by them as collateral for a sizable portion of their advances portfolio assumes significance in view of its implications for correct measurement of capital adequacy position of banks.

Therefore, there is a need for putting in place a system/procedure for realistic valuation of fixed assets and also for empanelment of valuers for the purpose.

Banks should have board approved policies in place for valuation of properties including collaterals accepted for their exposures and the valuation should be done by professionally qualified independent valuers with no direct or indirect interest.
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Cox & Kings to start forex operations
Mumbai: Travel company Cox & Kings has been granted Category II foreign exchange licence by the Reserve Bank of India. The development is expected to boost the company's foreign exchange business in the immensely competitive forex retail market.

As a full fledged money changer Cox & Kings' role was restricted earlier to providing foreign exchange to leisure and business travellers. But with the new status it can serve additional categories of customers such as students or patients travelling overseas, migrant Indians and corporate houses who would like to remit foreign exchange for services overseas or even movie producers who shoot overseas.

The company is now in the league of authorised dealers like foreign exchange nominated banks to cater to the requirements of a whole host of customers. Cox & Kings rival Thomas Cook India got the licence long ago.

The company expects this segment to contribute more than 50 pc to its future revenues.
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CBoP issues pref shares to venture fund
Mumbai: Centurion Bank of Punjab has received RBI approval for a preferential issue to India Advantage Value Fund V (managed by ICICI Venture Funds Management Company Ltd). The bank plans to issue 7.5-crore equity shares at a price of Rs24.54 per equity share.
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IOC liquidates Rs 806 crore oil bonds
New Delhi: Indian Oil Corporation (IndianOil) has now liquidated Rs806-crore worth of oil bonds maturing in 2021 and 2023 in the secondary market trade. In a statement issued here on Thursday, the company said that the sale was concluded through book building route.

An IOC statement said the issue generated a good response despite the constant strain on liquidity currently in the money markets. The yields and short-term interest rates have elevated post the announcement of CRR (cash reserve ratio) hike of 50 basis points by RBI.

The Government of India had issued oil bonds worth Rs7,168 crore maturing after 15-17 years to IndianOil in the current financial year in lieu of the under-recoveries suffered by the oil companies on the sale of liquefied petroleum gas (LPG) and kerosene.

IndianOil has liquidated oil bonds of about Rs6,000 crore of varying maturities (including the current sale) in the secondary market during the current fiscal, the company said.
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