The yen may have depreciated to 110 against the dollar from a high of 96 earlier this year, but bankers are advising extreme caution in using the Japanese currency for raising resources and hedging risks.
Government banks have demanded that the amount eligible under the farm waiver scheme should continue to be considered lending to the farm sector till the government clears the dues to help banks meet the mandatory priority sector lending target.
After years of waiting, finally there seems to be hope for the passage of the Pension Fund Regulatory and Development Authority Bill, thanks to the Left's withdrawal of support from the government. The passing of the Bill will provide statutory backing to the regulatory agency, enabling it to issue guidelines and allow non-government employees to save for the long-term. PFRDA Chairman D Swarup spoke to Business Standard about the issues involved.
Continuing the flow of home loans and accessing low-cost deposits are two key elements of the government's instructions to public sector banks.
The four Left parties may no longer be allies of the Congress party-led United Progressive Alliance, but their concerns on the pension Bill will still be addressed by the government.
Global crude oil prices have dropped 14 per cent in less than a fortnight, but the three public sector oil marketing companies could still end up borrowing more in the domestic market and put further pressure on liquidity. With the three OMCs still saddled with under-recoveries, estimated at Rs 820 crore (Rs 8.2 billion) a day, they have no option but to use bank credit lines in the coming days as they have run out of their stock of oil bonds.
Membership to help domestic banks access developed markets.
A day after Fitch lowered India's local currency outlook to negative, international rating agency Moody's said it was also worried about the reversal of India's fiscal situation due to high oil prices and the lack of policy adjustment by the government. Moody's, however, said it was unlikely to change its investment grade rating to India's sovereign foreign currency rating or the domestic currency rating, which is below investment grade.
Last week, after months of scrutiny, the Forward Markets Commission, the regulator for futures trading in commodities, approved a proposal from state-owned MMTC Ltd and finance-to-real estate group Indiabulls to set up a national multi-commodity exchange.
Banks are reluctant about disbursing loans for aviation studies on fears that a slowdown will hamper the job prospects in the aviation sector. The move, say analysts, may affect the fortunes of aviation training institutes.
Coal ministry says Sasan coal cannot be used for other plant.
Sensing a correction in the real estate sector, commercial banks have become selective in lending to new residential and commercial real estate projects.
The oil marketing companies are driving credit growth. The banking sector -- which typically sees credit contraction in the initial months -- has managed to buck the trend and has added nearly Rs 16,000 crore (Rs 160 billion) of advances in the first seven weeks of the current financial year thanks to the demand from the two sectors.
It's a difficult time for banks both at home and abroad. But Sanjay Nayar, Chief Executive Officer, Citi India, shrugs off Citigroup's problems in the US saying they haven't really impacted the Indian operations. Nayar admits there have been a few problems with the consumer finance business but tells Business Standard that Citi's India operations are well-positioned to see double digit growth over the next few years.
The amount is almost double the Rs 220 crore (Rs 2.2 billion) that a consortium of Bank of Baroda and Andhra Bank earned for its life insurance tie-up with the UK-based wealth and investment company, Legal & General Group (see table). The entry premium is a result of regulations that require foreign insurers to tie up with Indian partners. SBI will hold 74 per cent in the non-life insurance company and IAG the remaining 26 per cent.
SBI's move may not have moved the farmers, who had stopped paying their monthly installments ever since Finance Minister P Chidambaram announced a Rs 60,000-debt waiver plan, but it did create a furore in political circles. Finally, Chidambaram, by his own admission, had to intervene and get SBI to roll back the move. For the 57-year-old SBI chief, who has earned an unprecedented five-year term, it proved to be a rare instance of being 'misunderstood'.
The United Progressive Alliance government has made it clear to states that it will not permit them any relaxation in labour laws in special economic zones, petrochemical hubs and industrial parks such as easing norms for hiring and firing and employment of women and restricting union activity, among others. Over the last two weeks, at least three state governments have seen their proposals for relaxing labour laws in duty-free areas being rejected by the Centre.
Leading Indian public sector banks State Bank of India, Bank of Baroda and Syndicate Bank are close to committing a part of the $3 billion bridge loan that Tata Motors has to raise to finance the acquisition of Jaguar and Land Rover from Ford.
Though the Reserve Bank of India decided to reduce the risk weight for home loans between Rs 20 lakh (Rs 2 million) and Rs 30 lakh (Rs 3 million) to 50 per cent, the possible benefit for banks seems to be more than neutralised by 75 basis point rise in cash reserve ratio and increase in the cost of resources, which is linked to yields on government bonds and competition, bankers said.
The move comes even as Bank of India on Wednesday said its corporate clients will suffer mark-to-market losses of around Rs 125 crore. It has 34 clients with 74 derivative transactions. Last week, State Bank of India said its clients may incur MTM losses of up to Rs 700 crore at the end of March 2008.
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