Rupee ends unchanged
Mumbai: The Rupee ended unchanged against the dollar on Thursday at $40.90/91 as against the previous close of $40.89/90. The rupee opened at $40.79, saw an intra - day high of $40.73 on FII inflows and a low of $40.96 on strong demand from oil companies.

Market participants expect the rupee to depreciate to $41 next week.

In forwards, the six-month premia closed at 6.55 per cent (6.17 per cent) and the 12-month ended at 5 per cent (4.82 per cent).

Bonds: Bond yields rose by about nine basis points as liquidity is expected to tighten with the second phase of the CRR hike kicking in from April 28.

G-secs: The 8.07 per cent-10 year-2017 paper opened at Rs100.44 (8.01 per cent YTM) and closed at Rs100.07 (8.06 per cent YTM) against Rs100.64 per cent (7.97 per cent YTM) on Wednesday.

Call rates: Call closed higher at 9 - 9.25 per cent on Thursday against the previous close of 8 - 8.50 per cent. The RBI lent to banks Rs8,720 crore through the repo window while banks parked Rs115 crore under the reverse repo with the central bank. In the first one - day reverse repo auction, the RBI received and accepted one bid for Rs100 crore.

In the first one - day repo auction, it received and accepted five bids for Rs2,650 crore. In the second one - day reverse repo auction, it received and accepted one bid for Rs15 crore. In the second one - day repo auction, it received and accepted 18 bids for Rs6,070 crore.

CBLO: The CBLO market saw 460 trades aggregating Rs24,648.75 crore in the range of 6.10 - 8.25 per cent.
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Canara Bank signs agreement with ICRA
Bangalore: Canara Bank has entered into a memorandum of understanding with ICRA for the credit rating of small and medium enterprises.

The MoU would facilitate extending comprehensive rating services to all the bank's SME customers. This is especially significant since Canara Bank was aiming to expand its advances to the sector, the release added.
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LKB merger: HC ruling in May
Kolkata: The Kerala High Court is expected to pass a judgment in the case concerning the merger of Lord Krishna Bank with Centurion Bank next month.

The merger will still require an RBI approval, which, subject to the court's order, is expected to come in the April-June quarter.

Bank officials said if the bank gets RBI permission, the merger would go ahead quickly. The approval of the boards and shareholders of the two banks have been secured already.

CBoP expects to add critically to its reach, courtesy the merger. Its post-merger network will include over 400 branches and nearly 450 ATMs.
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LIC to file petition in SC over policy trading issue
Mumbai: The Life Insurance Corporation of India (LIC) is going to the Supreme Court to prevent trading in life insurance policies.

Last month, LIC lost a case in the Bombay High Court to bar Insurance Policy Plus Services (IPPS), a Mumbai-based insurance policies trader, from trading in life insurance policies.

The HC held that insurance policies were 'movable property' and can be traded in by a policyholder.

Though LIC allows a policyholder to assign (read transfer of rights) his policy to a bank or financial institution for mortgage or to a family member or a friend, it is against assigning the policy to an organisation for trading purposes.

Typically, trading is done on lapsed policies where investors, such as IPPS, pay the policyholder an amount which is higher than the surrender value paid by the insurer. This enables the policyholder to raise funds at a short notice and is a profitable business in the US and UK.

Assignment or transfer is a process by which a policyholder can transfer his rights to another entity. The entity pays the premium and enjoys the bonuses, benefits in the form of tax exempted returns and enjoys the survival benefits on maturity of the policy.

The assignee entity can be a family member, relative, friend, a bank, financial institution or a private entity. Assignment under valuable consideration is done when the policyholder mortgages his policy with a bank or an institution. Assignment under love and affection is done for a family member, relative or a friend.
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Private banks' service charge hike comes under RBI scanner
Mumbai: The service charges hike by commercial banks has come under the scanner of the Reserve Bank of India (RBI) after the apex bank and banking ombudsmen received customer complaints against levy of excessive interest rates and charges on certain loans and advances by banks.

The RBI has asked banks to lay down internal principles and procedures so that such exorbitant rate of interest, including processing and other charges, are best avoided.

The apex bank said, "Although interest rates have been deregulated, such rates going beyond a certain level may be seen as usurious and can neither be sustainable nor in conformity with the normal banking prudence.''

However, despite this recently ICICI Bank, UTI Bank and a few other private sector banks revised their service charges. All the banks have posted their revised service charges and fees on their websites.

According to a senior private sector bank official, "Banks like any other service providers are entitled to charge for the services offered. We want to encourage customers to use alternate channels of payments such as internet. Transaction costs at bank branches are very high. Routing these transactions to the internet and other electronic channels enables banks to reduce cost.''
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United Bank drops IPO plan
Kolkata: United Bank of India (UBI) has dropped its IPO plan for the current year after its capital restructuring plans were not cleared by the Reserve Bank of India (RBI) and the Finance Ministry.

The bank said it has funds to the tune of Rs800 crore in the upper and lower tier II levels, which could be used to fund business growth, if required. Further it has a CAR of 12.02 per cent as of March 2007 and there was no requirement to raise funds for growth at the moment.

UBI had proposed to convert 40 per cent of its equity to preference shares. But it did not get approval from the RBI and the finance ministry.

The bank later informed the finance ministry that it is not in immediate need of capital and it would go ahead with its restructuring plan after a few years. To fund the growth of the bank had already raised Rs200 crore as tier II capital earlier during 2006-07.

UBI reported 32.3 per cent growth in business to Rs59808 crore. While the deposits grew by 27.1 per cent to Rs37,167 crore, the advances grew by 41.8 per cent to Rs22,641 crore. The net profit grew by 30.7 per cent from Rs204.57 crore to Rs267.28 crore.
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State Bank of Bikaner net more than doubles
New Delhi: State Bank of Bikaner & Jaipur (SBBJ) has posted a net profit of Rs305.80 crore for fiscal 2006-07, which is more than double the net profit of Rs145.03 crore recorded in the previous year.

The bank said its net interest income recorded a 7.65 per cent increase to Rs1,068.86 crore from Rs992.90 crore. Meanwhile, the bank has declared a final dividend of Rs50 per share (face value of share is Rs100) for the financial year ended March 31, 2007. If one were to add the interim dividend of Rs50 per share, the total dividend for 2006-07 amounts to Rs100 per share. The dividend paid for 2005-06 was Rs65 per share. The total business has grown to touch a level of Rs49,246 crore.
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