1. The country's foreign exchange reserves surged by $1.789 bn to touch $197.746 bn in the week ended March 23, 2007. The reserves have increased by over $3.3 b in two consecutive weeks. During the week ended March 16, the reserves had touched $1.547 bn to $ 195.957 bn.
2. Bank of
3. Select branches of SBI that normally conduct Government business will remain open on Saturday, which is a holiday under the Negotiable Instruments Act. These branches will entertain customers to facilitate remittance of both direct and indirect taxes by assessees.
4. In yet another attempt to ensure price stability, the RBI upped the repo rate by 25 bps from 7.50% to 7.75 % and the Cash Reserve Ratio (CRR) by 50 bps to 6.50% in two phases effective April 14 and take out Rs 15,500 crs from the system. Also, banks will be earning less on CRR with the RBI snipping interest rate to 0.5% pa from the present 1% effective April 14. Banks earn nothing on the minimum CRR of 3% and will now get less on the extra 3.5%. The move may not hit bank balance sheets for the fiscal ended March 31, 2007, as the twin RBI announcements came after banking hours on Friday.
5. Interest rates are sure to harden, say bankers reeling from the RBI's `triple whammy'. The central bank's hike in repo rate by a quarter percentage point to 7.75%, increase in the Cash Reserve Ratio by 50 bps to 6.50%, as well as the cut in interest (from 1% to 0.5 %) on eligible CRR balances will push up interest rates for consumers and hurt the profitability of banks.
6. The first to announce a hike was Yes Bank, which raised its prime lending rate (PLR) by 75 bps to 14.75%, effective April 1. This is in accordance to the prevailing market conditions and today's hike in CRR and repo rates. This is despite the fact that the bank has negligible retail assets and capital markets exposures which are subject to higher provisioning. Lending rates of most private banks are at 14-14.75%, while the public sector banks price loans at 12.25-12.50%. The prevailing deposit rates are at about 9-9.5%. Bankers feel another hike in PLR is on the anvil. Banks are expected to see a drop of around 6-8% in their profits, said analysts.
7. United Bank of
8. The Allianz group, the German financial services major, is leaving no stone unturned to secure a banking licence from the RBI through its subsidiary, Dresdner Bank. The move follows the RBI’s rejection of the group’s proposal to let Dresdner Bank predominantly use the Allianz brand in
9. Syndicate Bank has entered into a MOU with Credit Analysis and Research Ltd (CARE), a credit rating agency, to jointly conduct rating of small and medium enterprises. The bank will make available affordable, transparent, comprehensive and reliable rating services to enhance credit acceptance and other services. The bank will make use of independent and objective opinion offered by rating agency for evaluating infrastructure, corporate and other loan exposures of Syndicate Bank.
10. The government is likely to cap foreign direct investment (FDI) in credit information bureaus at 49%, as it prepares guidelines for entry of foreign companies in this sector. The sector has become attractive due to the booming retail financial services market.
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