1. There has been a 63 per cent increase in external commercial borrowings made by Indian companies during the first seven months of this fiscal. About 384 companies have borrowed about $19 billion during the seven months ended October 2007, according to information released by the Reserve Bank of India.During the whole of the last fiscal, about 921 companies borrowed money worth about $25 billion abroad. This year the heavy borrowing comes despite steps taken by the Reserve Bank of India to limit access to external commercial borrowings to certain sectors and also tighten it generally by imposing a cap on the interest rates that can be paid on such borrowings.
2. The forex reserves increased by $33 million to $273.553 billion for the week ended December 7, due to currency revaluation. Compared to the earlier weeks the increase in this week is slightly subdued. The reserves went up $1.239 billion to $273.520 billion for the week ended November 30. In the week prior to that as well, forex reserves had increased by over $1 billion.
3. International ratings agency, Fitch Ratings, today upgraded Axis Bank’s National Long-term rating to ‘AAA (ind)’ from ‘AA+(ind)’. Fitch has also upgraded the bank’s individual rating to ‘C’ from ‘C/D’ and Support rating to ‘3’ from ‘4’. The ratings of debt programmes have also been upgraded.
4. Bank loans to equity-oriented mutual funds will now form part of the bank’s total capital market exposure, said the Reserve Bank of India in a note issued today.
In its note the RBI said, “Banks are advised to be judicious in extending finance to mutual funds and grant loans and advances to mutual funds only to meet their temporary liquidity needs for the purpose of repurchase/redemption of units.”
In its note the RBI said, “Banks are advised to be judicious in extending finance to mutual funds and grant loans and advances to mutual funds only to meet their temporary liquidity needs for the purpose of repurchase/redemption of units.”
6. CITI BANK-The bank generated in 2001-02 business worth Rs 15.7 crore per employee. But the bank has been able to generate only Rs 13.6 crore in fiscal 2006-07, down roughly 13 per cent. On the parameter of profit per employee, another key element, the figure for the latest year stands at Rs 17.33 lakh as against Rs 22.14 lakh, its best in 2001-02.
7. As many as three consortia have submitted their financial bids for buying 26 per cent stake in the country’s oldest financial institution, IFCI Ltd. The last date for submission of financial bids was December 14.
8. Asian Development Bank (ADB) would provide India with up to $500 million in loans designed to promote public-private partnerships (PPP) between the Government and the private sector in order to ramp up investments in infrastructure.The funds would be provided to government-owned India Infrastructure Finance Company Ltd (IIFCL) in multiple tranches over the next four years. It is estimated that the money would help catalyse private sector investments in infrastructure of up to $3.5 billion.IIFCL would provide funds at commercial terms with over 20-year maturity for infrastructure projects, which is not being currently provided by the market.
9. Calyon Bank, Mumbai, belonging to the Credit Agricole Group of France, has signed a `White Label' agreement with Karnataka Bank Ltd, to provide risk management services. This agreement will enable the bank to provide hedging products like derivatives to its customers.
10. Corporation Bank will now offer a ‘financial health check-up’ for its customers. The bank is offering this service at two of its centres, Mumbai and Bangalore. Customers can get their finance portfolio examined, find out if it is a healthy mix and get advice on making investments.
The bank plans to introduce this service at all its other important centres.
The bank plans to introduce this service at all its other important centres.
11. UTI Mutual Fund and SBI Mutual Fund have been given the mandate to manage the funds mobilised under the life insurance services provided through the post offices network.
Such services are currently administered by the Postal Department under the banner of Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) schemes.
Such services are currently administered by the Postal Department under the banner of Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) schemes.
12. Small Industries Development Bank of India (SIDBI) would within the next two months approach the Reserve Bank of India for approval to set up an asset reconstruction company (ARC) targeted at the small and medium enterprises (SME) sector. It is in talks with many public sector banks including Punjab National Bank, Canara Bank, United Bank of India to set up an ARC for the non-performing loans in the SME sector.
13. Vijaya Bank plans to raise Rs 500 crore this year through issue of the perpetual bond issues. It is raising the resources to strengthen the tier-one capital. Perpetual bond issues are treated as tier-one capital under the Reserve Bank of India guidelines. Vijaya Bank’s move to tap perpetual bonds was partly due to the fact that it has little room to raise equity resources. This was because current regulations allow government equity in public sector banks at a minimum of 51 per cent. Government stake in Vijaya Bank’s paid-up equity of Rs 433.52 crore is currently 53.87 per cent.
