Rupee at 8- year high
Mumbai: The rupee has crossed the the psychological mark of 43 and soared to an 8- year high of 42.88 / 89 intra-day on strong dollar supplies. However, the rupee closed around one to two paise lower at 43.08 / 09 against yesterday's close of 43.07.

Dealers said if the Reserve Bank of India does not intervene in the market, the rupee could strengthen further and appreciate to 42.50 and 42.80.

According to dealers, the rupee is overvalued by almost 10-11 per cent going by the real effective exchange rate.

Other Asian currencies such as yen have been stable; so the central bank may want to intervene in the market to reduce the rupee's volatility.

If the RBI consistently intervenes in the market, the rupee is likely to touch 44.50 in the next two months, said a senior treasury official.

The six-month forward premia closed higher at 5.11 per cent (5.93 per cent) and the one-year closed at 4.11 per cent (4.56 per cent).

Bonds: Bond prices gained by around 10 paise on signs of improvement in liquidity conditions. Total traded volumes on the order matching system were Rs1,915 crore.

Call rates: Call rates closed at 7-8 per cent per cent against 10-12 per cent on Tuesday. Reverse repo: Banks borrowed Rs10,000 crore from the RBI through the repo window in the first auction against Rs20,000 crore on Tuesday. Bankers said once the hike of the cash reserve ratio begins from April 14, cash will be scarce and call rates will tighten again to 10-11 per cent.

G-secs: The 8.07 per cent - 10 year-2017 paper opened at Rs99.32 (8.17 per cent YTM) and closed at Rs99.38 (8.16 per cent YTM) against the previous close at Rs99.31 (8.17 per cent YTM).

The 7.37 per cent - 7 year-2014 paper opened at Rs95.61 (8.20 per cent YTM) and closed at Rs95.58 (8.21 per cent YTM).
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GDP growth forecast revised to 8.5 per cent
Mumbai: The Reserve Bank of India has revised GDP forecast for 2007-08 to 8-8.5 per cent, lower than the estimated growth rate of 8.5-9 pc for 2006-07. The estimates came a few days after RBI tightened liquidity to raise rates and slow down credit growth thereby easing inflation pressures.

RBI deputy governor Rakesh Mohan addressing a CII summit on Innovation and Growth, said that the domestic economy was seen moving towards a sustainable growth path of 8-8.5 per cent for financial year 2007-08 and a low and stable inflation is key to help this trend.

Growth has averaged at 9.1 pc in the past two years, from 8 per cent in the previous two years. Incidentally, there appears to be a convergence in growth estimates of various agencies. Both the Asian Development Bank (ADB) and rating agency Moody's had recently announced a lower growth target for the coming fiscal.
Mohan said lowering of inflation levels will help reduce inherent risks. People investing in innovative products will be forced to curtail their investments, if faced with an additional macro-economic risk.

The deputy governor stated that apart from low and stable inflation, factors such as availability of credit, cost of funds, risk management techniques, etc. jointly serve to provide an environment fostering innovation and sustainable growth.
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StanChart to acquire stake in Morepen Labs
Mumbai: Standard Chartered Bank's investment arm is acquiring a stake in the ailing Morepen Labs, after private equity fund Avenue Asia cancelled the deal last week. As per the debt restructuring plan, Standard Chartered and the key promoter of Morepen — Sushil Suri — will infuse Rs100 crore each in a bid to revive the company.

Avenue Asia had committed to invest Rs150 crore in the company. When contacted, Morepen Labs managing director Sushil Suri declined to comment on the matter.

The company has also informed the exchange that it would issue 2.44 crore equity shares and 5.36 crore warrants. These warrants will be issued to the new investor and the promoter - both will have the rights to subscribe to the equity of the company.

The warrants will be issued at Rs20 per share. The shares of Morepen closed at Rs17 at the BSE on Tuesday after touching a high Rs17.85 and low of Rs16.85.

Morepen also proposes to repay fixed deposit holders, having failed to make timely payments.

Post restructuring, promoters stake will increase from 33 pc to over 50 pc while Standard Chartered will hold over 10 pc and debtholders will get 12-13 pc equity stake. Balance will be with public.
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Union Bank to become Basell-II compliant by March 2008
Kolkata: Union Bank will implement Basell-II capital risk norms by the end of March 2008 according to the bank's chairman and managing director M V Nair.

According to RBI guidelines, banks that don't have an overseas branch have to meet Basel-II norms by 2009 while those that have such a branch need be compliant with the norms by 2008.

Nair said the bank was planning to open an overseas branch in Hong Kong, for which it has not yet received permission.

Nair said Union Bank's capital adequacy ratio (CAR) by the end of March 2007 was expected to be 13 per cent.

Growth in deposits was 16 per cent at Rs85,250 crore, while that in advances was 16.5 per cent at Rs63,000 crore, he said adding the bank was expected to enjoy a spread of 2.9 per cent during 2006-07.
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Vijaya Bank registers 39 pc growth
Bangalore: Vijaya Bank has registered a total business of Rs 62,232 crore for FY07, a 39 per cent increase over FY06. The growth was well above the targeted Rs55,000 crore for last financial year said the chairman and managing director of the bank Prakash P. Mallya. He said FY07 saw advances of Rs24,852 crore and deposits of Rs36,000 crore. About 31 per cent of its deposits came from current and savings accounts during the period.

In FY07, the bank made cash recoveries of Rs288 crore, which is expected to contribute to its bottom line.
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ICICI Pru Life infuses Rs245 crore in capital base
Mumbai: ICICI Prudential Life Insurance Company has infused Rs245 crore and taken its capital base to Rs2,060 crore, the highest among the domestic life insurers.

The two promoters, ICICI Bank and Prudential plc, contributed to the capital in their existing proportions of 74:26, respectively. The company last hiked its capital base by Rs230 crore in January. In the last financial year, there has been a total capital infusion of Rs875 crore.

Bank officials said the company has been growing at 100 per cent and the capital will be utilised for expansion, funding new business and meeting the solvency norms stipulated by the regulator. In the recently concluded financial year, the company expanded its distribution network from 177 branches in March 2006 to 500 branches.

The insurer's agency force has also been more than doubled from 72,000 agents to 200,000 agents.
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