The Hindu Business Line : Friday, April 29, 2005

Banks asked to refocus on deposit mobilisation
THE Reserve Bank of India (RBI) has released its Annual Monetary and Credit Policy Statement for 2005-06. It is on expected lines except for the hike in the reverse repo rate. Would it result in higher deposit and lending rates? Not likely. At ... More

Right emphasis on growth and liquidity
The Credit Policy Statement for 2005-06 handles well the conflicting objectives of growth and price stability with an emphasis on creating an enabling environment of benign interest rates. Summing up macro-economic developments competently and reflec tive of the substantial improvement in the country's credit climate, the Policy will, it is hoped, provide the appropriate liquidity at reasonable rates says S. Venkitaramanan. More

More inward-looking than warranted
IN ITS Annual Monetary Policy Statement for 2005-06, the Reserve Bank of India has recognised the importance of a number of reform-related issues. However, the central bank somehow seems to have held itself back from full delivery on these ... More

A slick balancing act
THE Credit and Monetary Policy comes in the backdrop of high oil prices, unprecedented growth in non-farm credit and a massive government borrowings programme. However, economic conditions continue to remain strong with robust growth in ... More

Reflects buoyancy in economy
CONDITIONS of stability in the fiscal system help sustain the momentum of growth in the economy. The Monetary Policy Statement not only tries to promote stability but also provides an impetus to corporates to make their presence felt ... More

Priority for priority sector
THE Slack Season Monetary Policy for 2005-06 unveiled by the Reserve Bank of India strongly reflects the current developments in the local and global financial markets. As in the other parts of the globe, the major worries before Indian ... More

Govt borrowing may cost more
THE RBI has been proactive in dealing with inflationary expectations, by increasing the reverse repo rate right away. Many market participants were expecting such a rate hike, but not in this Credit Policy. The uncertainty, at least as of ... More

The RBI's shifting focus
THE RBI's Monetary Policy stance has changed from the Mid-Term Review of October 2004. In the latest review, price stability had emerged as the crucial determinant of its monetary policy stance. The conduct of monetary management in 2004-05 ... More

FOREX

Rupee in range; bond prices fall
MUMBAI: The rupee was range-bound between 43.70 and 43.72 against the dollar on Thursday and remained largely lacklustre. It opened at 43.72/7250 and ended at 43.7050/7150, marginally weaker than Wednesday's close at 43.7250. Dealers said ... More

CREDIT POLICY

RBI hikes reverse repo rate to absorb excess liquidity — Alert sounded on rate front
INTEREST rates across bank loan products are set to rise. The economy was placed on alert on Thursday by the Reserve Bank of India when it marked up the reverse repo by 25 basis points to five per cent, while leaving the Bank Rate and CRR ... More

Closer SIDBI, banks linkage for SSI credit flow
THE Reserve Bank of India is drawing up a scheme to forge a strategic alliance between the branches of different commercial banks and those of SIDBI to enhance the flow of credit to the small-scale industries (SSI). This is part of RBI's ... More

Non-bank players, except PDs, to be off money market from Aug 6
STATE governments will raise money directly from the market, as per the recommendations of the Twelfth Finance Commission. The Reserve Bank of India, in its Annual Monetary Policy,stated it will implement the recommendations in consultation with ... More

`More room for overseas buys'
INDIAN companies increasing their global presence through overseas investments received a fillip from the Credit Policy with the RBI hiking the limit for such investment under the automatic route from the earlier level of 100 per cent of a ... More

Post-harvest loan limit doubled to Rs 10 lakh
THE Reserve Bank of India proposes to double the limit of loans to farmers under the post-harvest produce marketing scheme to Rs 10 lakh from Rs 5 lakh. This is under the priority sector lending, RBI said it in its annual policy statement ... More

Reverse repo rate hike — PDs nervous, seek safety net
`For PDs to manage interest rate risk, they should be allowed to participate in a limited way in the forex markets.' More

RBI takes note of small depositors!
FOR Indian banks an ordinary depositor is an unwanted small change. One has spent time behind counters of the Government banks with the staff on the other side of the glass partition busy chatting or sipping tea. One confesses to nervy sweating ... More

India Inc says policy is `pro-growth'
INDIA Inc on Thursday welcomed the Reserve Bank of India's move to leave the interest rates unchanged as part of Credit Policy and termed the policy "pro-growth". The industry chambers also welcomed the measures aimed at improving credit flow to ... More

`A pointer to turn in interest rate cycle'
MR N. Sampath Kumar, Executive Director, Ashok Leyland Finance (now merged with IndusInd Bank), said, "Interest rates are stable right now. But I expect hike in the reverse repo rate once again before the end of June. In any case, the RBI ... More

SOFTWARE

Esanda picks Finacle
BANGALORE: Esanda, the wholly owned subsidiary of ANZ Banking Group, has chosen Infosys's universal banking solution, Finacle, to launch its new product called Online Saver in the Australian mainstream savings market. Finacle enables ... More

GENERAL INSURANCE

BHEL gesture
HYDERABAD: The BHEL R.C. Puram has introduced a Personal Accident Insurance Policy for non-BHEL employees like contract labour, apprentices, project assistants etc., as a social security measure. The move would benefit 3,500 people. BHEL ... More

DEBT MARKET

Bond prices decline
THE bond market turned volatile with prices of securities falling by nearly a rupee and yields hardening by almost 15 basis points following a mark up in reverse repo rate by 25 basis points to 5 per cent by the RBI today. The actively traded ... More

GOVT BONDS

Reverse repo hike not to impact lending rates, says Chidambaram
THE Finance Minister, Mr P. Chidambaram, has said that the Reserve Bank of India's move to hike the reverse repo rate would not immediately affect lending rates of banks. He also hinted that the Central Government might borrow less than the ... More

NON-PERFORMING ASSETS

'No velvet glove to big defaulters'
THE Finance Minister, Mr P. Chidambaram, on Thursday said that he expected higher recoveries of non-performing assets by public sector banks in the coming months on account of the strengthening of the Securitisation Act. "The strengthening of ... More

INTERVIEW

Interest of depositors is key for banks: Reddy
AFTER a hectic day in office, presenting the annual policy statement to bankers, and thereafter addressing media in a number of sessions, the Reserve Bank of India Governor, Dr Y.V. Reddy, seemed to be at peace with himself. Setting the tone, ... More

CO-OPERATIVES

`Vaidyanathan panel report not acceptable in present form'
THE Chairman of the Karnataka State Apex Cooperative Bank Ltd, Mr Rajendra Kumar, has said that the implementation of the Vaidayanathan Committee report in its present form is not acceptable to cooperative banks. Presiding over a meeting of ... More

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Reverse repo rate hike — PDs nervous, seek safety net

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Leyland turnover crosses $1 b; net up 40 pc

In Focus

BHEL Disinvestment