Top Stories 

PMEAC cuts FY13 GDP growth forecast to 6.7%

Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister released the document ‘Economic Outlook 2012-13’ at a Press Conference in New Delhi.

Following are the highlights of the document: Economy to grow at 6.7% in 2012-13
Farm sector GDP projected to grow at 0.5% in 2012-13 due to the impact of weak monsoon on agriculture and the current reservoir storage position in 2012-13… Read more

RBI remains averse to further monetary easing

The Reserve Bank of India (RBI) is reportedly in no mood to cut interest in the near-term as inflation continues to impact food and non-food prices, and the Government fails to put breaks on its fiscal profligacy.

KC Chakrabarty, Deputy Governor RBI was quoted as saying that interest rates will fall when inflation drops. RBI will assess if the inflation fall is sustainable. Inflation of about 5% is within India’s comfort zone. He also warned that only an improved fiscal situation could prevent a ratings downgrade… Read more

RBI releases report of Working Group on enhancing liquidity in G-Secs

The Reserve Bank of India has released the report of the Working Group on Enhancing Liquidity in Government Securities and Interest Rate Derivatives markets. The Group has made various recommendations, which have been categorised into essential recommendations; desirable recommendations and operational recommendations… Read more

Deposit insurance cover is applicable to deposits in co-op banks

The deposit insurance coverage is applicable to all eligible deposits in co-operative banks, Finance Minister P Chidambaram informed Rajya Sabha.

According to current norms of Deposit Insurance and Credit Guarantee Corporation (DICGC), a 100% subsidiary of the Reserve Bank of India (RBI), a maximum of Rs. 1 lakh is paid to a depositor if a bank becomes insolvent.

“In terms of the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, the deposit insurance coverage is also applicable to the eligible deposits held in all eligible co-operative banks,” Mr Chidambaram said in a written reply… Read more

RBI releases draft guidelines on Management of Intra-Group transactions

The Reserve Bank of India releases Draft Guidelines on ‘Management of Intra-Group Transactions and Exposures’. This guideline is applicable to all scheduled commercial banks, including foreign banks operating in India, belonging to a financial Group irrespective of whether the bank is parent or where the bank’s parent is a regulated financial entity or a non-operating holding company… Read more
 
In Focus News

Exempt loss making banks, insurers from CCI ambit: Ministry

The Finance Ministry has asked Ministry of Corporate Affairs to exempt loss making insurance and banking firms from the scope of Competition Act, Parliament was informed.

The Competition Act, 2002 does not provide exemption to any sector, including banking, from its ambit… Read more

Aadhaar as valid address proof for investors

Market regulator SEBI (Securities and Exchange Board of India) said investors can use Aadhaar cards as a valid address proof for their accounts with brokerage firms, mutual funds, portfolio managers and other capital market entities.

Aadhaar is a 12-digit individual identification number issued by UIDAI (Unique Identification Authority of India). Any individual, irrespective of age and gender, who is a resident in India and satisfies the verification process laid down by the UIDAI can enrol for Aadhaar… Read more

Banks to compensate for delay in clearance of local cheques

The Reserve Bank of India (RBI) has asked banks to compensate their customers for delay in clearance of local cheques. Banks will have to pay the compensation at savings bank interest rate in absence of a specified rate for delayed clearance of local cheques, according to the RBI directive.

The RBI circular said, “In case, no rate is specified in the Cheque Collection Policies (CCP) for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay.”… Read more

Leaders’ Speak

CDR—Issues & way forward: Dr KC Chakrabarty 

Corporate debt restructuring (CDR) or simply restructuring of loans and advances, with all its pros and cons, is an effective financial tool, especially during the times of crisis, for smoothening the adverse effects of economic downturns on the borrowers of credit as well as their lenders… Read more

Mobile banking transactions are as safe as Internet transactions: ICICI Bank

Replying to Anil Mascarenhas of IIFL, Rajiv Sabharwal , Executive Director, ICICI Bank, says, “New avenues of business generation, as shopping and other merchant payment solutions options, do show early potential to bring a sea-change in banking business.”… Read more

Subbarao sticks to hawkish stance on sticky inflation

RBI Governor D Subbarao on Monday stuck to a hawkish tone, reiterating concerns about sticky inflation and once again prodding the Government to do its bit by reigning in its fiscal profligacy. The RBI has stayed on hold since cutting its main interest rate in April by a bigger-than-expected 50 basis points to 8%... Read more

Bancassurance Low cost; large reach

Unlike an agent that can only sell insurance, properly trained bank staff can dedicate themselves to serving all their customers’ financial needs in one-stop, John Holden says… Read more

We continue to invest in technology: HDFC Bank

Yash Ved of IIFL provides the highlights of a media interaction where Paresh Sukthankar, Executive Director, HDFC Bank says, “Our strategy is to move from standalone HDFC Bank brand in terms of cards to explore relationship with important alliances. We do see an opportunity to cater to niche segments and to add superior value to these segments.”… Read more

New Appointments

World Bank names Jin-Yong Cai as new CEO of IFC

Jin-Yong Cai, a Chinese national with more than 20 years of experience in the financial services industry and development, was announced as the new Executive Vice President and CEO of IFC, a member of the World Bank Group… Read more

New Launches

IndusInd Bank launches Indus Forex Card

IndusInd Bank has launched foreign currency pre-paid travel card–the Indus Forex card that is designed to offer travellers all the convenience and a secure way of carrying foreign currency abroad… Read more

Volkswagen Finance announces Škoda Rapid Rs. 9,999 offer

Volkswagen Finance Pvt Ltd has introduced an exciting limited period offer of Rs. 9999 EMI on the ŠKODA Rapid. The new EMI scheme gives customers a chance to fulfill their dream of upgrading to a spacious and premium sedan, the ŠKODA Rapid… Read more

HDFC Bank raises Rs34.77bn from debentures

HDFC Bank Ltd has issued on a private placement basis Unsecured, Redeemable, Non-Convertible, Subordinated Bonds in the nature of Debentures towards Teir - II Capital as detailed hereunder: Lower Tier II Bonds for an amount aggregating Rs. 34.77bn.

Domestic News

IIFL Q1 PAT up 11% QoQ

India Infoline Ltd (IIFL) income for the first quarter for FY12-13 stood at Rs. 5,826 mn, down 8% qoq. Profit after Tax first quarter for FY12-13 was at Rs. 522.2 mn, up 11% qoq, while profit before tax was at Rs. 820.8 mn, up 13% qoq… Read more

ADB, IFMR, Ratnakar Bank structure Partial Guarantee Program for MFIs

In a first large scale partial guarantee program for microfinance institutions in India, Asian Development Bank has provided partial credit guarantee to loans to Microfinance Institutions (MFIs) in India.

IFMR Capital is the structurer, lead arranger and co-guarantor to the transaction. Ratnakar Bank, acting as a domestic banking partner for this facility, will provide the liquidity by extending rupee loans to MFIs in Indiabacked by the partial guarantees… Read more

Fiscal deficit needs to be addressed: KV Kamath

On addressing University of Michigan India Alumni Association conference, K. V. Kamath, Chairman, ICICI Bank said that "We are lagging seven years behind China in terms of production of steel and cement. Lack of clarity on policies, is holding back India’s growth, said K. V. Kamath, Chairman, ICICI Bank. Corruption is very serious and debilitating, said Kamath… Read more 

Manappuram Finance reaches 3,000 branch milestone

Manappuram Finance Ltd, one of the leading gold loan companies in India, has attained a new milestone with the opening of its 3,000th branch today, at Nai Abadi in Mandsaur, Madhya Pradesh. The company’s branch network now extends over 22 states and 4 UTs… Read more

M&M signs MoU with Oriental Bank of Commerce

Mahindra & Mahindra Ltd signed a preferred financier agreement with Oriental Bank of Commerce (OBC). Under the tie-up, M&M customers will be able to avail of vehicle finance services from any of the 1808 branches of OBC having pan India presence… Read more

PMC Bank selects IBM Smarter Computing approach

Punjab & Maharashtra Co-op Bank Ltd (PMC) has selected the IBM Smarter Computing approach to IT to accelerate its growth and reach in the fast developing financial services landscape in India. PMC Bank chose to migrate its applications including core banking to an IBM infrastructure with Power Systems to support the growing needs of its more than 66 branches, two extension counters and ATM network, while strengthening its online presence through remote banking… Read more

ICICI Bank US$ 750 mn international bond offering

ICICI Bank has priced an issuance of 5.5 year fixed rate in aggregate principal amount of US$750MN. The offering had an order book of US$6.7bn with interest from over 312 investors.

Gitanjali Gems to issue Rs. 390mn debenture to DB Corp

Gitanjali Gems has said that the Board of Directors of the Company in its meeting held on August 11, 2012 decided to issue 1% Fully Convertible Debentures (FCDs) having face value of Rs. 390 million on preferential basis in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009 as amended from time to time to DB Corp Limited, subject to approval of shareholders in ensuing Annual General Meeting.

SBI Q1 net profit at Rs. 37.51bn

SBI Ltd has posted results for the first quarter ended 30 June, 2012. Its net profit was stood at Rs37.51bn. Its NII was stood at Rs111.19bn. Gross NPAs for Q1 FY13 stood at 4.99% vs 4.44% in the previous quarter while net NPAs stood at 2.22% vs. 1.82% QoQ… Read more

Global News

ADB helps China plan carbon capture, storage road map 

The Asian Development Bank (ADB) is assisting the People’s Republic of China (PRC) in the development of a road map for carbon capture and storage (CCS) to help achieve the country’s carbon dioxide (CO2) emissions reduction goals.

“There is an urgent need to fast-track the demonstration and deployment of carbon capture and storage in the People’s Republic of China to cut CO2 emissions from the energy and industrial sectors and achieve the country’s long-term climate change mitigation goals,” said Annika Seiler, Finance Specialist for Energy at ADB’s East Asia Department… Read more

Moody's assigns 'Baa3' to IOB's USD senior notes

Moody's Investors Service has assigned a Baa3 rating to Indian Overseas Bank's (IOB) proposed USD senior notes drawdown from its US$1 billion Medium Term Note Programme through its Hong Kong branch… Read more

Japan's economy grows well below forecast in Q2

Japan's economy expanded in April-June at half the pace expected, as domestic spending almost came to a grinding halt and export growth decelerated, increasing the chance for monetary and fiscal stimulus. Gross Domestic Product (GDP) grew at an annualized pace of 1.4% in the three months through June, a Cabinet Office report showed in Tokyo. That was less than the median estimate of 2.3% and down from 5.5% growth clocked in the previous quarter… Read more

Standard Chartered to pay $340 million to settle charges: Reports

London based Standard Chartered has agreed to pay New York Department of Financial Services $340 million to settle claims that it laundered billions of dollars in tainted money for Iran and lied to regulators, according to media reports.

The New York Department of Financial Services had took on the bank in charging that it schemed for nearly a decade with Iran to hide from regulators 60,000 transactions worth $250 billion.

As part of the settlement, the bank will install a monitor for at least two years to vet the bank’s money-laundering controls and put in permanent officials who will audit the bank’s internal procedures.