Rupee declines marginally
Mumbai: The rupee fell by two-three paise against the dollar on a weak stock market. The domestic currency opened at around 44.29/30, settled for long at 44.27/44.28 and finally closed at 44.29/30, against the previous close of 44.27 on Thursday.

Dealers said the rupee is likely to trade in the 44.25-44.29 range.

The six-month forward premia closed at 3.03 per cent (3.23 per cent) and the one-year closed at 2.94 per cent (2.98 per cent).

Bonds: Bond prices fell by 15 paise on profit booking. Total traded volumes on the order matching system were Rs1,310 crore (Rs1,780 crore).

Market participants expect bond prices to be range-bound with a bearish undertone.

G-secs: The 7.37 per cent-7 year-2014 paper opened at Rs97.10 (7.91 per cent YTM) and closed at Rs96.67 (7.99 per cent YTM), against Thursday's Rs96.83 (7.96 per cent YTM).

The 8.07 per cent-10 year-2017 benchmark paper opened at Rs101.13 (7.90 per cent YTM) and closed at Rs100.89 (7.93 per cent YTM), against Thursday's Rs100.94 (7.93 per cent YTM).

Call rates: Call remained unchanged at 6-6.1 per cent on Friday. In the first three-day reverse repo auction, the RBI received and accepted six bids for Rs1,055 crore. In the second three-day reverse repo auction, it received and accepted 41 bids for Rs21,365 crore. There were no repo bids.

CBLO: The CBLO market saw 328 trades aggregating Rs17,649.55 crore in the 2-6.9 per cent range.
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Vijaya Bank to raise capital through Tier-II bonds
New Delhi: Vijaya Bank has now decided to raise capital through a Tier-II bond offering.

The bank had earlier indicated that it would raise capital of about Rs500 crore through a mix of Tier-I and Tier-II capital and had looked at a perpetual debt instrument for raising Tier-I capital. The bank plans to raise at least Rs300 crore in subordinated bond. The bank might also look at an overseas offering for raising capital sometime next fiscal.

Vijaya Bank's capital adequacy is currently pegged at about 11.38 per cent and is expected to go to 12 per cent if Rs500 crore of fresh capital is raised. Already during the current fiscal, Vijaya Bank has raised Rs250 crore of Tier-II capital at 9.25 per cent.

The bank has targeted a total business of Rs60,000 crore by end-March and is on course to achieve our total business target of Rs60,000 crore by end-March.
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NHB to offer guarantees for reverse mortgage
Mumbai: The National Housing Bank (NHB) says it will offer guarantees to senior citizens availing of reverse mortgage facility from lenders to provide protection against any defaults by banks and housing finance companies (HFCs).

"NHB will guarantee senior citizen borrowers' obligation to banks and HFCs to make regular payments over the period. NHB, as a RBI subsidiary, may be expected to provide comfort to senior citizens who are mortgaging houses upfront to receive payment over time.

However, the guarantee will be optional and can be availed of a fee," said S Sridhar, chairman, NHB.

Reverse mortgage allows senior citizens with inadequate income sources to mortgage their own homes for ensuring a regular stream of income for up to 15 years.

At the end of the reverse mortgage period, the owner will have the option of retaining the house after paying the principal plus interest to the lender or the lender can sell the house and pay the owner the difference between the amount due and the sale price.

According to estimates, the market for reverse mortgage could be around Rs5,000 crore. Citizens above 62 years of age will be eligible for the reverse mortgage scheme. NHB will also provide refinance to banks and HFCs to extend reverse mortgage loan.
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Govt looks at investing forex in Euro securities
New Delhi: A part of the country's $185 billion foreign exchange reserves may be invested in risk-free securities like Euro Treasury Bills as a part of the government's strategy to generate higher returns from the huge forex pile and devote the income derived to finance infrastructure.

The Reserve Bank of India deploys foreign exchange reserves mostly in short-term US treasury bills.

The investment in Euro securities may done by one of the two proposed overseas subsidiaries of India Infrastructure Finance Company Ltd (IIFCL).

The investments are initially expected to give the same returns as the RBI gets from US treasury bills. The rate of returns is expected to be higher on incremental investments.

The RBI is expected to lend about $5-$6 billion to IIFCL for investing in risk free overseas securities, guaranteeing special purpose vehicles (SPVs), financing import of capital goods and co-financing external commercial borrowings of Indian companies.
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Forex reserves soar $4 billion
Mumbai: Foreign exchange reserves zoomed $4.212 billion to $193.124 billion for the week ended February 23, according to the weekly supplement released by the RBI.

Foreign currency assets moved up $4.213 billion to $186.128 billion. Gold reserves and SDRs were unchanged at $6.529 billion and $2 million, respectively.

The Reserve Tranche Position with the IMF declined $1 million to $465 million.
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