Rupee declines against dollar
Mumbai: The rupee fell against the dollar as the demand for the greenback rose. The currency opened at 44.20/23 and fell to a low of 44.26 to finally close at 44.26 against Friday's 44.20/21.

The domestic also followed the movements in the domestic equity market.

In forwards, the six-month closed at 3.04 per cent (3.15) and the 12-month ended at 2.93 per cent (2.98).

Bonds: Bond prices rose by 30 paise and yields fell by about three-four basis points on the RBI's decision to absorb only Rs2,000 crore under the market stabilisation scheme (MSS) through the auction of 6.65 per cent Government stock-2009.

The market was expecting a bigger auction. Total traded volumes on the order matching system were Rs4, 385 crore.

G-secs: The 8.07 per cent-10 year-2017 benchmark paper opened at Rs100.75 (7.96 per cent YTM) and closed at Rs100.84 (7.95 per cent YTM), against Friday's close at Rs100.54 (7.98 per cent YTM).

The 7.37 per cent-7 year-2014 paper opened at Rs96.75 (7.97 per cent YTM) and closed at Rs96.83 (7.96 per cent YTM).

Call rates: Call rates closed at 5.20-5.40 per cent today against previous close at 5.40-5.60 per cent on Friday.

Reverse repo: In the first one-day reverse repo auction, the RBI received twenty-one bids for Rs19,170 crore, while it accepted Rs1,999 crore. In the second one-day reverse repo auction, the RBI received seventeen bids for Rs13,650 crore, while it accepted Rs1,999 crore. There were no repo bids.

CBLO: The CBLO market saw 421 trades aggregating Rs25,492.95 crore in the 4.02-6.20 per cent range.
Back to News Review index page  

IRDA hits Vijaya Bank's insurance venture
Chennai: Vijaya Bank may exit PNB Principal Insurance Advisory — a joint venture of The Principal Financial group of the US, Punjab National Bank and Vijaya Bank following objections raised by Insurance Regulatory and Development Authority over Vijaya Bank using its staff to sell insurance products on behalf of the broking firm.

The bank has a 19-per cent stake in the joint venture.

Officials of the bank said the bank's management was considering setting up a separate broking firm if it could be structured to meet IRDA's requirements. He, however, noted that a decision on this was a while away.

It may be recalled that Vijaya Bank had a corporate agent licence for selling the products of National Insurance Company. In 2005, IRDA objected to the bank's `dual presence' — as a corporate agent for one company and a partner in an insurance broking firm — after which the bank surrendered its agent licence.
Back to News Review index page  

Indian banks to face data management issues under Basel II norms
Mumbai: According to a survey conducted by Oracle India, i-flex and Indian Banks' Association, data management is likely to be one of the key challenges for Indian banks in adopting the standardised approach under the Basel II norms. The Basel II Accord aims at reducing risk in the financial system worldwide by aligning each bank's capital requirements to more accurately reflect its own credit, market and operational risks.

According to the survey, private sector banks may have an edge over public sector entities in data management.

Most public sector banks are still in the process of rolling out core banking solutions across their branches, and the standardisation of data residing in myriad systems across various branches was proving to be challenging, said the survey.

Around 94 per cent of the surveyed bankers cited process standardisation, cost control, standardising and storing data, and acquiring the necessary skill sets as the primary challenges to Basel II compliance. Of these, public sector banks and private banks rated process standardisation as their primary concern, while foreign banks and co-operative banks rated cost control as their main concern.

All the surveyed banks appreciated the RBI shift in deadline to 2008 as an opportunity to adopt a holistic approach.
Back to News Review index page  

GIC to have 15-per cent share of reinsurance cover from April
Bangalore: The statutory share of the national reinsurer, the General Insurance Corporation of India (GIC), would be reduced to 15 per cent from April as part of the second phase of the insurance sector reforms. Currently, the domestic non-life insurers — both public and private sector — are expected to mandatorily cede 20 per cent of their insurance risks to GIC.

The mandatory cession would be further reduced to 10 per cent from April 2008, onwards.

Officials in GIC said the insurer also favours the reduction since it would reduce its liabilities in an environment of intense competition and falling premiums. This is despite the fact that 76 per cent of GIC's gross premium income come from within the country.

Till March 2006, gross premiums were a little over Rs4,800 crore. Of this, around 82 per cent was from obligatory cessions. Last year, GIC had earned about Rs400 crore by way of reinsurance. With focus on Eastern Europe, West and East Asia, GIC's global premium income is expected to be well over Rs1,500 crore this year, the sources said
Back to News Review index page