1. The export prices of Indian products in major exporting sectors have become uncompetitive by 10-12% on an average compared to competing countries' products as a result of rupee appreciation against the US Dollar, according to a survey conducted by industry chamber FICCI.
2. Forex reserves have increased by $3.439 billion to $208.373 billion for the week-ended June 1 on revaluation of non-dollar currencies against the dollar and RBI's intervention in the forex market. Forex reserves had gone up by $952 million to $204.934 billion for the week-ended May 25.
3. The air is abuzz with talk of a new hi-tech, low-cost deal for farmers and other rural folk. Hub and spoke models are spoken of, and ATMs wired for bio-and speech-recognition. Salaries, loan disbursals, proceeds of bulk sales at procurement centres and market yards, and revenue earned by sales to private traders, could be directly credited at a centralised location. Account holders could check that this has been done, or draw on this money at any one of the dozens of ATMs sprinkled all over the place. Tedious visits to branches, time and time again, would no longer be necessary. But, though life would become a great deal easier for account holders, whose numbers would, therefore, increase in leaps and bounds, bankers themselves would need to be pretty nimble to avoid indiscriminate lending and ensure good recoveries. Customers, too, would face a problem if they wished to deposit cash. ATMs can pay out thousands in a jiffy. But their ability to count is greater than their ability to recognise what they are counting. They can be `taught' how to scrutinise notes fed into them. But they are slow learners. It would still take them three to five minutes to verify every note. Feeding 100 tenor fifty rupee notes into an ATM would take pretty much all day.
4. The Union Finance Minister, Mr P. Chidambaram, has asked the Security Printing Press - Hyderabad (SPPH) to diversify into tapping commercial business opportunities in smart cards, university degree printing, MICR cheques, National I-Card project and so on.Promising substantial investments in the next 5-10 years in equipping the Press with latest technology, Mr Chidambaram said the National I-Card project itself demands 100 crore cards. Similarly, printing of driving licenses offers big business.
5. RBI has mandated that only instruments which are fully and mandatorily convertible into equity, within a specified time would be reckoned as equity under the Foreign Direct Investment policy; and reckoned as eligible for issuance to persons resident outside India.
6. Centurion Bank of Punjab is providing loan to DLF group employees to participate in the issue of DLF Ltd. The bank offered to provide loans to the DLF employees for subscribing in the IPO against shares. One million shares are reserved for the employees of DLF out of a total offering of 175 million equity shares of Rs 2 each at a price band fixed between Rs 500 and Rs 550. Only a section of the 2,600 employees, including 2,100 professionals of DLF group comprising DLF Ltd and its subsidiaries, will be eligible for the preferential allotment of equity shares from the company's upcoming IPO.
7. Air India has floated enquiries calling for bids from banks and financial institutions for the second tranche of aircraft deliveries beyond December 2007 till March 2009, as also pre-delivery payments in respect of aircraft and spare engines. The financial packages have been invited for EXIM guaranteed facility for $1.06 billion and commercial facility of $181.25 million for 10 aircraft, comprising a combination of 777-200 LRs, 777-300 ERs and 787. Air India said it would evaluate any other innovatively structured financing package that is not based on US EXIM- guaranteed financing or a sovereign guarantee.
8. Gross bank credit fell by Rs 4,541 crs and stood at Rs 18,86,520 crs for the fortnight ended May 25, according to the RBI 's Weekly Statistical Supplement. The gross bank credit was inclusive of food credit, which dropped by Rs 2,541 crs to touch Rs 44,864 crs and non-food credit, which fell by Rs 2,001 crs to Rs 18,41,656 crs.
9. Barclaycard, part of the Barclays Bank Group, sees partnerships as a cornerstone for its growth in the Indian credit card market. Although a recent entrant in the domestic credit card market, it soon hopes to be among the larger players in this market on the back of its brand equity, product innovation and the focus on scale besides partnerships.
10. The All India State Bank Officers' Federation has deferred the countrywide strike scheduled for June 8 by two weeks. It has deferred the strike to avoid inconvenience to customers and also to give some time to the management to address its demands. The federation had called for a strike in protest against the "unilateral actions" by the management on issues such as promotion policy and outsourcing of core banking operations to private institutions.
11. Bank of Baroda and Reliance Capital Asset Management Co Ltd have entered into a marketing tie-up for distribution of Reliance Mutual Fund products through select branches of the bank. BOB looks at this tie-up as customer centric strategy. In the drive towards providing greater customer convenience, the bank will continue to enlarge its basket of products, both its own and also third party, leveraging its vast branch channel, latest technology and customer base.
12. "A large foreign bank" is on the verge of picking up minority stake (up to 49 %) in Repco Home Finance Ltd, the housing finance subsidiary of Repco Bank, the Chennai-based multi-state co-operative bank. Confirming this to Business Line, Mr M. Balasubramanian, Managing Director of Repco Home Finance, said that the deal was likely to be sealed in August. "The due diligence is over and we are in the final stages of negotiations," he added.
13. The loans against securities (LAS) scenario is undergoing another round of change, with lending institutions looking at hiking rates in the context of recent modifications in the interest-rate structure and growing uncertainties in the markets. Investors who had lately opted for LAS point out that many of them now have a tough time dealing with revised rates, following decisions by LAS providers to do so. Such moves are to be seen against rates that have risen steadily over the past few months. Capital market circles agree that investors — bank clients who have taken loans — may well find it more expensive to borrow and invest, a likelihood that may discourage a section of them from adding to their leveraged exposure.
14. Foreign investors have picked up 46,862 shares of Tamilnad Mercantile Bank Ltd , which works out to 16.47% of the paid-up equity of the bank. Members of the Nadar community have also purchased another 48,556 shares of the bank, or 17.06%. With this, all the 95,418 shares (33.58%) of the bank that were with Mr C. Sivasankaran, Chairman of the Sterling group of companies, have been bought out. This effectively brings the curtain down on the controversial stake-sale that has been raging for 14 years now.Senior sources in the bank said that the transactions have been approved by the RBI.
15. The Finance Ministry plans to take a re-look at the criteria for appointment of additional executive directors (EDs) in public sector banks (PSBs), especially from the viewpoint of the number of branches. Currently, the additional ED appointment is determined on the parameters of business turnover and number of branches. For the recent round of additional ED appointments, the Finance Ministry went by the parameter of Rs 1,00,000 crore of business turnover and branch network of around 2,000 as on the balance sheet date of March 31, 2006.
16. Banks and financial institutions in the country might lay a major thrust to the adoption of packaged software in areas beyond core banking. The non-core banking applications are that of customer relationship management and human resources management among others. Packaged software worth $263 million has been purchased and installed by banks and financial institutions during 2006, according to a recent Skoch Consultancy research, which is expected to go up to $305 million in 2007.
2. Forex reserves have increased by $3.439 billion to $208.373 billion for the week-ended June 1 on revaluation of non-dollar currencies against the dollar and RBI's intervention in the forex market. Forex reserves had gone up by $952 million to $204.934 billion for the week-ended May 25.
3. The air is abuzz with talk of a new hi-tech, low-cost deal for farmers and other rural folk. Hub and spoke models are spoken of, and ATMs wired for bio-and speech-recognition. Salaries, loan disbursals, proceeds of bulk sales at procurement centres and market yards, and revenue earned by sales to private traders, could be directly credited at a centralised location. Account holders could check that this has been done, or draw on this money at any one of the dozens of ATMs sprinkled all over the place. Tedious visits to branches, time and time again, would no longer be necessary. But, though life would become a great deal easier for account holders, whose numbers would, therefore, increase in leaps and bounds, bankers themselves would need to be pretty nimble to avoid indiscriminate lending and ensure good recoveries. Customers, too, would face a problem if they wished to deposit cash. ATMs can pay out thousands in a jiffy. But their ability to count is greater than their ability to recognise what they are counting. They can be `taught' how to scrutinise notes fed into them. But they are slow learners. It would still take them three to five minutes to verify every note. Feeding 100 tenor fifty rupee notes into an ATM would take pretty much all day.
4. The Union Finance Minister, Mr P. Chidambaram, has asked the Security Printing Press - Hyderabad (SPPH) to diversify into tapping commercial business opportunities in smart cards, university degree printing, MICR cheques, National I-Card project and so on.Promising substantial investments in the next 5-10 years in equipping the Press with latest technology, Mr Chidambaram said the National I-Card project itself demands 100 crore cards. Similarly, printing of driving licenses offers big business.
5. RBI has mandated that only instruments which are fully and mandatorily convertible into equity, within a specified time would be reckoned as equity under the Foreign Direct Investment policy; and reckoned as eligible for issuance to persons resident outside India.
6. Centurion Bank of Punjab is providing loan to DLF group employees to participate in the issue of DLF Ltd. The bank offered to provide loans to the DLF employees for subscribing in the IPO against shares. One million shares are reserved for the employees of DLF out of a total offering of 175 million equity shares of Rs 2 each at a price band fixed between Rs 500 and Rs 550. Only a section of the 2,600 employees, including 2,100 professionals of DLF group comprising DLF Ltd and its subsidiaries, will be eligible for the preferential allotment of equity shares from the company's upcoming IPO.
7. Air India has floated enquiries calling for bids from banks and financial institutions for the second tranche of aircraft deliveries beyond December 2007 till March 2009, as also pre-delivery payments in respect of aircraft and spare engines. The financial packages have been invited for EXIM guaranteed facility for $1.06 billion and commercial facility of $181.25 million for 10 aircraft, comprising a combination of 777-200 LRs, 777-300 ERs and 787. Air India said it would evaluate any other innovatively structured financing package that is not based on US EXIM- guaranteed financing or a sovereign guarantee.
8. Gross bank credit fell by Rs 4,541 crs and stood at Rs 18,86,520 crs for the fortnight ended May 25, according to the RBI 's Weekly Statistical Supplement. The gross bank credit was inclusive of food credit, which dropped by Rs 2,541 crs to touch Rs 44,864 crs and non-food credit, which fell by Rs 2,001 crs to Rs 18,41,656 crs.
9. Barclaycard, part of the Barclays Bank Group, sees partnerships as a cornerstone for its growth in the Indian credit card market. Although a recent entrant in the domestic credit card market, it soon hopes to be among the larger players in this market on the back of its brand equity, product innovation and the focus on scale besides partnerships.
10. The All India State Bank Officers' Federation has deferred the countrywide strike scheduled for June 8 by two weeks. It has deferred the strike to avoid inconvenience to customers and also to give some time to the management to address its demands. The federation had called for a strike in protest against the "unilateral actions" by the management on issues such as promotion policy and outsourcing of core banking operations to private institutions.
11. Bank of Baroda and Reliance Capital Asset Management Co Ltd have entered into a marketing tie-up for distribution of Reliance Mutual Fund products through select branches of the bank. BOB looks at this tie-up as customer centric strategy. In the drive towards providing greater customer convenience, the bank will continue to enlarge its basket of products, both its own and also third party, leveraging its vast branch channel, latest technology and customer base.
12. "A large foreign bank" is on the verge of picking up minority stake (up to 49 %) in Repco Home Finance Ltd, the housing finance subsidiary of Repco Bank, the Chennai-based multi-state co-operative bank. Confirming this to Business Line, Mr M. Balasubramanian, Managing Director of Repco Home Finance, said that the deal was likely to be sealed in August. "The due diligence is over and we are in the final stages of negotiations," he added.
13. The loans against securities (LAS) scenario is undergoing another round of change, with lending institutions looking at hiking rates in the context of recent modifications in the interest-rate structure and growing uncertainties in the markets. Investors who had lately opted for LAS point out that many of them now have a tough time dealing with revised rates, following decisions by LAS providers to do so. Such moves are to be seen against rates that have risen steadily over the past few months. Capital market circles agree that investors — bank clients who have taken loans — may well find it more expensive to borrow and invest, a likelihood that may discourage a section of them from adding to their leveraged exposure.
14. Foreign investors have picked up 46,862 shares of Tamilnad Mercantile Bank Ltd , which works out to 16.47% of the paid-up equity of the bank. Members of the Nadar community have also purchased another 48,556 shares of the bank, or 17.06%. With this, all the 95,418 shares (33.58%) of the bank that were with Mr C. Sivasankaran, Chairman of the Sterling group of companies, have been bought out. This effectively brings the curtain down on the controversial stake-sale that has been raging for 14 years now.Senior sources in the bank said that the transactions have been approved by the RBI.
15. The Finance Ministry plans to take a re-look at the criteria for appointment of additional executive directors (EDs) in public sector banks (PSBs), especially from the viewpoint of the number of branches. Currently, the additional ED appointment is determined on the parameters of business turnover and number of branches. For the recent round of additional ED appointments, the Finance Ministry went by the parameter of Rs 1,00,000 crore of business turnover and branch network of around 2,000 as on the balance sheet date of March 31, 2006.
16. Banks and financial institutions in the country might lay a major thrust to the adoption of packaged software in areas beyond core banking. The non-core banking applications are that of customer relationship management and human resources management among others. Packaged software worth $263 million has been purchased and installed by banks and financial institutions during 2006, according to a recent Skoch Consultancy research, which is expected to go up to $305 million in 2007.
