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 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.
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.
With little clarity on the list of companies that have mark-to-market losses on derivatives transactions, banks are now asking their corporate banking departments to scan the books of borrowers and also seek details of their foreign exchange exposure. Within this pie, banks are segregating companies with turnover of Rs 30-40 crore (Rs 300-400 million) to Rs 100 crore (Rs 1 billion) and those which are above this threshold.
There may not be any legal obstacles to the State Bank of Saurashtra's merger with the State Bank of India but it is the United Progressive Alliance's political compulsions that are holding back the deal, which is expected to pave the way for merger of the other six SBI associates with the parent. In response to the law ministry's objections, the RBI has told the government that the Centre could go ahead with the merger without any immediate legal glitches.
A host of public sector banks had cut interest rates in the earlier part of this year following an advisory from Finance Minister P Chidambaram in January. Private and smaller state-owned banks, however, did not cut rates.
Three years after IDBI became a bank, Yogesh Agarwal, bank's third chairman and managing director in as many years, is trying to put the pieces in place. After all, as he pointed out in an interview with Business Standard, the erstwhile development financial institution is grappling with a unique situation, where IDBI and the two commercial banks it acquired since 2005 offer loans at different interest rates.
Lenders ask RBI to ensure cheaper credit for infrastructure sector. Banks say while hardening of rates may be required to combat inflation, even a 50 basis point rise could render many projects unviable. In a meeting with RBI, bankers factored in the impact of higher interest rates on most sectors as a part of the inflation management drive but indicated that the government & the central bank should take steps to ensure cheaper credit for building roads, power plants & ports.
The decline in stock values has created room for the issue of fresh participatory notes, but there are not many takers. P-notes are off-shore derivative instruments issued to foreign investors having securities as underlying. Sebi had banned the issue of derivative P-notes on October 25 last year. Brokers have started focusing on direct FII money rather than the P-note investments. New P-note regime & FII registration procedures are being implemented based on Sebi circular.
Move follows 26 per cent acquisition in Ahmedabad's NMCE.
C S Bhave has to work on the homework of his predecessor to speed up the processes in the market. He also has to contend with the bitter legal battle between Sebi and his organisation NSDL.
Fresh investments through participatory notes (P-notes) are flowing into the cash market in huge quantum. The rush of investments is because foreign institutional investors (FIIs) have enough headroom to invest through P-notes.
Stocks lead the chart with 50 per cent returns, followed by real estate and gold. The markets may be expecting a correction now, but the year has been a spectacular one for those who had put money in stocks. Equities gave a return of 49.64 per cent, the same as in the last three years.
Foreign institutional investors, who are big players in the futures and options segment, are making a killing in the domestic market by using arbitrage as a weapon in the spot and derivatives trade as well as structured derivative deals. The arbitrage game is on despite the curb on the issue of P-notes or participatory notes by the Securities and Exchange Board of India recently.
The Indian markets look extremely stretched. The Sensex valuations have gone up 19.28 per cent to 26 per cent since the lows triggered by the sub-prime crisis two months ago. Taiwan and Kospi, on the other hand, have not changed much. A Citi group report suggested that the RBI might hike CRR rates to suck out excess liquidity from the system. An increase of one per cent would draw out $7 billion from the system.
The curbs on participatory notes (P-notes), announced by the Securities and Exchange Board of India (Sebi) on Thursday, have virtually ended a flourishing business of many leading foreign institutional investors (FIIs). Observers said the brokerage fees for offshore P-note transactions were nearly four times higher than those prevailing in the onshore market in India.
According to estimates by Citigroup India, P-note investments, excluding the underlying shares, account for 34 per cent of FII assets with custodians in BSE-500 companies. Sebi stipulates that P-Notes can account for up to 40 per cent of FII assets under custody. This leaves room for FIIs to increase their exposure through P-notes 6 percentage points.
Regulating PNs are important when the country has some restrictions on foreign investments. Countries having full capital account convertibility do not need FIIs to even register.
When Dhirubhai Ambani entered with his big bang public offer the foundation for the Indian stock market was laid.
The commodity futures market has started losing its sheen after a stupendous growth rate of 96.05 per cent in the last financial year
© 2025 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances