Rupee at 41.17
Mumbai: The rupee closed at another high of 41.17, reacting to the annual monetary policy statement of the RBI. The rupee opened at 41.65 and touched an intra-day high of 41.05 to finally end the day at 41.17 against Monday's close at 41.67/68. Market participants said all-round selling of dollars buoyed the domestic currency to touch a level it has not seen since May 1998.

The RBI has reduced the inflation target to 5 per cent in 2007-08 and set a range of 4 to 4.5 per cent over the medium term.

Bonds: Bond prices rallied by about 75 paise (yields came down by around 10 basis points) as the RBI kept the short-term interest rates (reverse-repo, repo and cash reserve ratio) unchanged. However, market players expect further monetary tightening from the central bank as it has revised its inflation target to 5 per cent and further down to 4-4.5 per cent in the medium term.

G-secs: The 8.07 per cent-10 year-2017 paper opened at Rs99.75 (8.11 per cent YTM) and closed at Rs100.52 (7.99 per cent YTM) against Rs99.76 per cent (8.10 per cent YTM) on Monday.

The 7.38 per cent-8 year 2015 paper opened at Rs95.44 (8.14 per cent YTM) and closed at Rs96.23 (8 per cent YTM) against Monday's close of Rs95.41 (8.15 per cent YTM). Call rates: Call rates ruled at 8-8.25 per cent against previous close of 9-9.25 per cent.

Reverse Repo: In the first one-day reverse repo auction under LAF, the Reserve Bank of India received and accepted three bids for Rs125 crore and in the first one-day repo auction, the RBI received and accepted 23 bids for Rs14, 365 crore. In the second one-day reverse repo auction, the RBI received five bids for Rs1,615 crore and accepted five bids for Rs1,000 crore. In the second one day repo auction, the RBI received and accepted two bids for Rs40 crore.
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Interest rates remain unchanged
Mumbai: Reserve Bank of India (RBI) has left its key signalling rates unchanged.

The Apex bank also sought to discourage net foreign currency inflows by making deposits by non-resident Indians (NRI) less attractive and allowing greater outflows by companies as well as individuals.

The ceiling on interest rates banks can pay on NRI deposits has been reduced by 50 basis points. The ceiling on overseas investments by companies has been raised to 300 per cent of their net worth from 200 per cent and by mutual funds to $4 billion from $3 billion. The limit on pre-payment of overseas borrowings has been enhanced to $400 million every year from $300 million.
Hedging norms have also been liberalized. Domestic producers and users of aluminium, copper, lead, nickel and zinc have been allowed to hedge in overseas markets like the London Metal Exchange. Airlines have also been permitted to hedge their aviation turbine fuel (ATF) requirements in the overseas markets.
For all other hedging requirements, RBI will consider requests on a case-to-case basis.

Offering relief for home loan borrowers, the RBI has reduced the risk weight for capital allocation purposes on home loans up to Rs 20 lakh to 50 basis points from 75 basis points with a message to banks to pass on the benefit to customers.

RBI kept the repo (repurchase) rate at a five-year high of 7.75 per cent and cash reserve ratio (CRR) at 6.5 per cent as it forecast the growth in the economy at "around" 8.5 per cent in 2007-08 down from 8.5-9 per cent for 2006-07 and the advance estimates of 9.2 per cent growth.

RBI is expecting inflation to fall to 5 per cent in 2007-08 and has reduced its medium-term inflation goal to 4-4.5 per cent from 5 per cent.
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Risk weight on home loans reduced to 50 per cent
Mumbai: The RBI has reduced the risk weight on residential housing loans to individuals from the existing 75 per cent to 50 per cent.

Bankers say this is as an encouragement to offer housing loans up to Rs20 lakh and expect interest rates on this category of loans not to be hiked further.

According to senior bankers, this move was expected as the Finance Minister had also asked PSU bank chiefs in a recent meeting at Delhi to offer more small value loans (up to Rs20 lakh) without marking up their cost.

The RBI has also said risk weight on loans up to Rs1 lakh against gold and silver ornaments has been reduced to 50 per cent from the existing level of 125 per cent for all categories of banks.

Loans against gold and silver ornaments are mostly availed by the poorer sections of the society in rural and urban areas.

These loans entail relatively low risk as they are extended with adequate margins and the collateral (gold or silver) is easily marketable, particularly where the size of the loan is small, said the RBI statement.
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SBI Cardholders get benefit on fuel purchase
Mumbai: SBI cardholders will no longer have to pay the 2.5 per cent surcharge on purchase of fuel at petrol pumps.

Introducing the 'Fuel Freedom' initiative SBI said "the special feature enables all SBI cardholders to enjoy zero per cent surcharge on purchase of fuel across any petrol pump in any city". The waiver is applicable on transactions between Rs400 and Rs3,000.

"The new feature comes on the back of a program launched by SBI Card in 2002 called FILL-IT-UP (FIU), wherein its cardholders could enjoy the 2.5 per cent surcharge waiver at IOC and IBP petrol pumps only," SBI said in a release.

SBI Card is a joint venture between State Bank of India and GE Money to offer Indian consumers extensive access to a wide range of world-class, value-added payment products and services.
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HDFC Bank Q4 net up 30 per cent at Rs343 crore
Mumbai: HDFC Bank has posted a 30.53 per cent increase in net profit at Rs343.57 crore for the quarter ended March 31, as compared to Rs263.21 crore for the same quarter last year.

The total income of the bank grew by 41.69 per cent to Rs2,384.19 crore for the quarter ended March 31, from Rs1,682.65 crore in the corresponding quarter a year ago, the bank informed the BSE.

The board of directors of the bank at its meeting today declared a dividend of Rs7 on shares of Rs10 each (70 per cent) for the year ended March 31.

HDFC Bank for the year ended March 31, the bank posted a net profit of Rs1,141.45 crore as against Rs870.78 crore a year ago and the total income rose to Rs8,405.25 crore from Rs5,599.32 crore in the period under consideration in 2006.

The total income of the group grew to Rs8,464.52 crore for the year ended March 31, from Rs5,630.92 crore a year ago.
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YES Bank Q4 net up 102 per cent
Mumbai: Yes Bank has registered a 102-per cent growth in net profit at Rs30.90 crore for the quarter ended March 31, 2007 against Rs15.32 crore in the previous year. For the year ended March 31, 2007, the net profit grew by 71 per cent at Rs94.36 crore against Rs55.32 crore last year.

The net interest income rose in the fourth quarter by 79.14 per cent to Rs46.31 crore (Rs25.85 crore for the same period last year) while that for the full year went up by 94.54 per cent to Rs171.35 crore (Rs88.08 crore).

Non-interest income rose by 137 per cent in the fourth quarter to Rs78.73 crore from Rs33.21 crore last year.

Total income for the quarter was up 177 per cent to Rs281.09 crore (Rs 101.34 crore) while for the year it rose 170 per cent this year from Rs289.92 crore last year to Rs782.18 crore.

Total advances for the year grew 161 per cent to Rs6,290 crore (2,407 crore) and total deposits went up 182 per cent to Rs8,220 crore (Rs2,910 crore).

The scrip closed higher by 4.38 per cent at Rs153.55 on BSE on Tuesday.
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Highlights of RBI's annual credit policy
Mumbai: Following are the highlights of RBI's Annual Policy Statement for the year 2007-08:

• No change in key rates - Bank rate 6 per cent, CRR 6.5 per cent, Repo 7.75 per cent
  
• GDP growth lowered to 8.5 per cent for 2007-08
  
• Inflation to be kept close to 5 per cent
  
• Medium term inflation to be 4-4.5 per cent
  
• Risk weight on home loans reduced
  
• Risk weight on loans against gold, silver reduced
  Money supply to be contained to 17-17.5 per cent
  
• Deposits to grow to Rs4.9 lakh crore
  
• Interest rate cap on FCNR (B), NRE lowered by 0.5 per cent
  
• Overseas investment limit for companies raised to 300 per cent
  
• ECB prepayment level allowed up to $400 million
  
• Remittances abroad limit doubled to $100,000 million
  
• Working group on currency futures to be set up
  
• Credit guarantee scheme for distressed farmers
  
• NBFC deposit rate ceiling upped 12.5 per cent.

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