Rupee flat
Mumbai: The rupee opened at 44.25/27 on Tuesday, but dollar buying by public sector banks, on behalf of oil companies, pushed it to 44.34. However, it could not sustain at that level as there was dollar selling which strengthened rupee to 44.31, said a dealer at a private bank.

The rupee ended at 44.27/28 against the previous close of 44.28 on Monday.

The six-month forward premia closed at 3.64 per cent (3.36 per cent) and the one-year closed at 3.10 per cent (2.91 per cent).

Bonds: Bond prices edged up by more than 20 paise on value buying. Total traded volumes on the order matching system stood at Rs4,055 crore.

G-secs: The 8.07-10 year-2017 benchmark paper opened at Rs102.08 (7.77 per cent YTM) and closed at Rs102.15 (7.76 per cent YTM), up from Monday's Rs101.93 (7.79 per cent YTM).

The 7.59 per cent-9 year-2016 paper opened at Rs98.90 (7.76 per cent YTM) and closed at Rs98.94 (7.75 per cent YTM), higher than Monday's Rs98.73 (7.79 per cent YTM).
Call rates: The inter bank call rate was unchanged at 8-8.20 per cent.

According to news reports, O P Bhatt, chairman, SBI, said, there was ample liquidity in the financial system to support credit growth and there were no signs of an overheating economy.

Reverse repo: In the first one-day reverse-repo auction under LAF, the RBI received and accepted one bid for Rs20 crore and in the repo auction, the central bank accepted 19 bids for Rs9,435 crore. In the second one-day reverse-repo auction, the RBI accepted three bids for Rs70 crore and in the second three-day repo auction, the RBI received and accepted 15 bids for Rs7,185 crore.

CBLO: The CBLO market saw 327 trades aggregating to Rs18,245.10 crore in the 7.22 per cent-7.28 per cent range.
Back to News Review index page  

Banks to give upto Rs20-lakh education loans under priority sector
Chennai: Under the draft guidelines on priority sector issued by the Reserve Bank of India, banks can grant up to Rs10 lakh to individuals for studies in India and up to Rs20 lakh for studies abroad. The earlier limits were Rs7.5 lakh and Rs15 lakh respectively.

Under current guidelines of the RBI, banks can direct 40 per cent of their loans to "priority sector".

Priority sector includes loans given to agriculture, small-scale enterprises, micro credit, housing loans (less than Rs15 lakhs), besides weaker sections of society among other categories.

Banks are expected to direct at least 18 per cent of their loans to agriculture (under the overall limit of 40 per cent). For foreign banks, in view of their lack of rural branches, they are expected to only lend 32 per cent of their loans to priority sector. In their case, they have been given a sub-target of 10 per cent for export credit.

The draft guidelines will have the effect of increasing bank credit to priority sector, since there has been a change in the definition of "adjusted net bank credit". This would now include bank investments in non-SLR bonds in the (held to maturity category). Alternatively, the credit equivalent of off-balance sheet exposures, whichever is higher, will be included in the limits to compute the 40 per cent figure.
Back to News Review index page  

SBH nets Rs99 crore in Q3
Hyderabad: State Bank of Hyderabad (SBH) recorded a total income of Rs1,036.41 crore and a net profit of Rs98.87 crore for the third quarter ended December 31, 2006 against a total income of Rs799.89 crore and a net profit of Rs62.11 crore in the corresponding quarter last fiscal.

For the nine months ended December 31, 2006, the bank recorded total income of Rs2,884.58 crore and a net profit of Rs305.95 crore as against total income of Rs2,322 crore and a net profit of Rs203.59 crore for the corresponding period last year.
Back to News Review index page  

IndusInd Bank ties up with Aviva for bancassurance
Mumbai: IndusInd Bank has has entered into a bancassurance partnership with Aviva Life Insurance.

Bhaskar Ghose, managing director, Indusind Bank, said: "We are certain that our partnership with Aviva would bring out the best in us, which would translate into innovative products and services for our customers. Recently, we received 40 branch licences from Reserve Bank of India (RBI), which will help us in raising the profitability of the bank by selling insurance and mutual fund products."

The bank shares the vision and values of Aviva and expects to provide insurance products to its customers in the first phase. Subsequently, innovative and segmented propositions will be introduced for the customers. The partnership will be on a referral type business model, the release said.
Back to News Review index page  

ADB bond issues in India to raise $1bn
New Delhi: Asian Development Bank has said that it will issue bonds in India in order to raise $1bn, which will be utilised to provide rupee denominated loans to public sector undertakings or state government projects. The bank expects the permission to be granted early this year.

The loans would be mostly meant for infrastructure projects and would be disbursed as and when the demand arises. ADB had sought 'best conditions' for the bonds so that those could be passed on to the borrower.

Unlike earlier, when funds raised through bonds were used for private sector project fundings, the upcoming bonds are meant for the public sector project financing.

ADB will increase the amount of loan approvals in India to $2.45bn this calendar year, against $2.2bn in 2006 and to $2.85bn by 2009. ADB disbursed $701mn in India last year and expects to increase disbursals to over $1bn in 2007, bank sources said.
Back to News Review index page  

SBI chairman assures of ample liquidity
Mumbai: State Bank of India Chairman O P Bhatt has said there is ample liquidity in the financial system to support credit growth, and there were no signs of overheating of the economy.

Bhatt said the last quarter of every fiscal always shows high credit growth and banks are generally prepared for it.

He said with 30 per cent plus SLR, SBI was comfortable with the liquidity.

Bhatt also said there were no signs of overheating of the Indian economy, which has grown at a robust 8-9 per cent in the last two quarters, making it the second fastest major economy in the world.
Back to News Review index page