Rupee opens strong
Mumbai: The rupee recovered as companies sold dollars. The Indian currency opened at 44.55/57 and touched an intra-day low of 44.59. It closed the day at 44.46/47 against Monday's close at 44.63/64.

The rupee opened strong due to the recovery of stock markets across the globe. The Sensex gained 282 points on Tuesday.

Forward premia inched up slightly, with the 6 month closing at 2.90 per cent (2.82 per cent) and the 12 month ended at 2.86 per cent (2.81).

Bonds: Bond prices were almost unchanged as uncertainty over the new Market Stabilisation Scheme (MSS) continued. Total traded volumes on the order-matching system were low at Rs555 crore.

G-secs: The 7.37 per cent-7 year-2014 paper opened at Rs96.62 (7.998 per cent YTM) and closed at Rs96.53 (8.02 per cent YTM), against Monday's Rs96.54 (8.01 per cent YTM). The 8.07 per cent-10 year-2017 paper opened at Rs 100.71 (7.96 per cent YTM) and ended at Rs 100.80 (7.95 per cent YTM), against Monday's Rs100.83 (7.94 per cent YTM).

Call rates: Call rates were steady at 5.20-5.30 per cent (5-5.25).

Reverse repo: In the first one-day reverse repo auction, the RBI received 25 bids for Rs15,400 crore, but accepted only 25 bids for Rs2,000 crore (against the limit of Rs 2,000 crore). In the second one-day reverse repo auction, it received 17 bids for Rs7,425 crore, but accepted only 17 bids for Rs994 crore (limit Rs1,000 crore). There were no repo bids.

CBLO: The CBLO market saw 393 trades aggregating to Rs25,353.95 crore in the 4.84-6.60 per cent range.
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RBI imposes cap on inter-bank liabilities from April 1
Mumbai: The Reserve Bank of India (RBI) has put caps on inter-bank liabilities from April 1, 2007, as smaller banks have been borrowing heavily to tide over tight liquidity.

The RBI has also asked banks with high concentration of wholesale deposits to contain the liquidity risk arising out of excessive dependence on such deposits.

Bulk deposits constituted nearly 20 per cent of term deposits of the banking sector, banking sources said.

The inter-bank liabilities were capped at 200 per cent of net worth on March 31, 2006.

The move is likely to affect smaller banks - private, public as well as foreign - as they have lower net worth compared to large banks like State Bank of India, which has a net worth of Rs28,000 crore.

Meanwhile, the RBI has asked banks to convey in writing the reason for rejecting loan applications and also mandated that loan application forms across all categories of loans, irrespective of the amount, should be comprehensive.
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P Chidambaram to address RBI board
New Delhi: Finance Minister, P. Chidambaram, will address the Central Board of Directors of the Reserve Bank of India here in a customary post-budget meeting. Indications are that `inflation,' the state of the economy and its growth prospects, the steps taken by the RBI and the Union Government would come in for elaborate discussion at the meeting. The meeting may also discuss the proposed stake transfer in State Bank of India between the RBI and the Government.

In Budget 2007-08, the Finance Minister had announced that the Government proposes to acquire RBI's equity holding in SBI. He had said that a sum of Rs40,000 crore has been provided for this purpose and that the transaction would be "deficit neutral" to the Government.
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GE Energy sets up office in India
Mumbai: GE Energy Financial Services, a unit of General Electric, is setting up its office in India to pursue investments in energy and water.

GE Energy Financial Services has $13 billion in assets and invests more than $5 billion annually, according to a release from the company.

The company said it is lending Rs75 crore ($17 million) to Binani Cement for construction of a 22.3 MW thermal power plant and associated common utilities in Sirohi in Rajasthan. The company said for the Binani power plant, its finance will cut costs by nearly $4 million annually and provide a highly reliable electricity source.

The release also said that power plant will enable Binani Cement, a subsidiary of Binani Industries, to meet its enhanced power requirement to expand annual production by April from 2.25 million tonnes to 5.3 million tonnes.

Binani Cement also plans to build another 22.3 MW plant. Besides, it is proposing a public equity shares offer, the release said.

The move is part of GE's initiative to generate more earnings from outside the US by tapping into rapidly growing economies.
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