Rupee gains
Mumbai: The rupee gained against the dollar on Wednesday on dollar selling by corporates. The rupee opened at 44.28/30 and stayed in a range. Selling of dollars by a major corporate house led to the rupee rising during the day. The currency touched an intra-day high of 44.18 and finally closed at 44.19/20, against Tuesday's close at 44.27/28.

In the forwards market, the six-month closed at 3.75 per cent (3.64 per cent) and the 12-month ended at 3.16 per cent (3.10 per cent).

Bonds: Bond prices fell by almost 20 paise (yields went up by three basis points) on reports of a possible Presidential consent to an Ordinance allowing the Reserve Bank of India the flexibility to set the floor rate for the Statutory Liquidity Ratio of banks, by the end of this month. Total traded volumes on the order matching system dropped to Rs2,810 crore (Rs4,055 crore).

G-secs: The 8.07-10 year-2017 benchmark paper opened at Rs102.19 (7.75 per cent YTM) and closed at Rs101.9 (7.79 per cent YTM) against Tuesday's Rs102.15 (7.76 per cent YTM).

The 7.59 per cent-9 year-2016 paper opened at Rs99 (7.74 per cent YTM) and closed at Rs98.76 (7.77 per cent YTM) against Tuesday's Rs98.94 (7.75 per cent YTM).

Call rates: Call rates ruled at 8-8.2 per cent.

Reverse repo: Under the one-day reverse-repo auction under LAF, the RBI received and accepted one bid for Rs20 crore and in the first one-day repo auction, it received and accepted 16 bids for Rs6,815 crore. In the second one-day reverse-repo auction, the RBI accepted and received five bids for Rs140 crore and in the second one-day repo auction, it received and accepted 14 bids for Rs5,810 crore.

CBLO: The CBLO market saw 296 trades aggregating Rs19,102.5 crore in the 7.22-7.27 per cent range.
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IDBI increases deposit rates
Mumbai: IDBI has increased the interest rates on Suvidha fixed deposit, across all maturities, by 25-75 basis points, effective January 17. Deposits up to Rs15 lakh, with a maturity of 1-3 years under the scheme will carry an interest rate of 8 per cent against 7.25 per cent or 7.50 per cent earlier.

Term deposits above Rs15 lakh and up to Rs100 lakh will now fetch a higher interest rate by 25-50 basis points. The maximum rate of interest that IDBI would now offer in the case of such deposits is 8.75 per cent (8.50 per cent) on term deposits of between five years and up to ten 10 years' maturity, said an official press release by the bank.
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SLR ordinance may receive president's approval by month-end
New Delhi: An ordinance, which seeks to empower the Reserve Bank of India (RBI) to cut the statutory liquidity ratio (SLR) to below 25 per cent, is expected to be brought in by this month-end or early February.

The Reserve Bank is slated to come out with its quarterly monetary and credit review on January 31.

Under the present requirements of SLR, banks have to keep 25 per cent of their total deposits in the form of liquid assets comprising cash, gold and approved securities, mostly government bonds.

Last week, the cabinet cleared the ordinance to cut the floor limit of SLR. The decision to bring an ordinance to amend Banking Regulation Act, 1949, would provide RBI more operational flexibility in the conduct of monetary policy.

Sources said an ordinance could only be promulgated before the president summons the Parliament, which is generally 21 days before the session.

If the session begins on February 23, as is expected, then the President is expected to summon the houses by February 2 in which case the ordinance cannot be issued after February 1.
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Government may legislate to regulate MFIs
New Delhi: The government plans to introduce a new Bill in the forthcoming budget session to regulate and develop microfinance institutions, to improve access of credit to the poor.

Microfinance institutions (MFIs) will be regulated by the National Bank for Agriculture and Rural Development (Nabard), which would frame lending, deposit and recovery methodologies for these institutions.

There will be stricter regulation for MFIs that accept deposits, while non-deposit institutions engaged in lending to self help groups would be least regulated said government sources.
There would be no cap on interest rates for lending by MFIs.

In the banking system, the cost of transactions is borne by borrowers, while in the case of micro-financing the cost of transaction is borne by micro credit institutions.

The MFI Bill will validate activities of MFIs like thrift collections, provide equity support, define microfinance services and give regulatory powers to Nabard.
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PNB Housing in pact with IFFCO-Tokio
New Delhi: PNB Housing Finance (PNBHF), a wholly owned subsidiary of Punjab National Bank, has entered into a pact with IFFCO-Tokio General Insurance (ITGI) to provide the latter's fire and personal accident insurance policy to its home loan customers.

By partnering with IFFCO-Tokio PNBHF would be able to leverage ITGI's operation and training expertise.

Ajit Narain, MD & CEO, IFFCO-Tokio General Insurance, said that the tie-up was an extension of the general insurer's association with the PNB Group. "It will help us leverage their vast network and widespread customer base and strengthen our marketing and distribution channels," he said.
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