Business Daily from THE HINDU group of publications
Friday, Apr 18, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Friday, Apr 18, 2008 ePaper | Mobile/PDA Version | Audio |
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Forex Corporate - Derivatives Markets Money & Banking - Financial Markets
Ms Chanda Kochhar Our Bureau Mumbai, April 17 Some corporates who filed cases against banks after they suffered losses on currency derivative deals, are willing to settle out of court, as court may take a long time to settle these cases, said Ms Chanda Kochhar, Joint Managing Director, ICICI Bank. She said there is no systemic risk from currency derivatives transactions and the estimated loss is not very large compared to the total cash flow of corporates. Speaking to presspersons on the sidelines of a banking seminar, Ms Kochhar said that it is unfair to take a general view that many corporates did not understand the derivatives deals. “The corporates were aware. More than 80 per cent of the corporates involved who have exposure to currency derivatives are mid and large corporates. Sometimes there are profits and sometimes there are losses,” she said. ICICI Bank and some other private sector have been taken to court by companies for losses suffered in currency derivatives transactions. Companies have alleged that the banks indulged in ‘mis-selling’ of derivatives products without fully explaining the implications of the possible losses arising out of currency fluctuations. When asked about a likelihood of a rise in interest rates, Ms Kochhar said that given the liquidity in the system, interest rates will remain where they are for some time. ICICI Bank would look at reducing deposit rates only if it impacts its cost of funds. “For the past few months we have not seen any change in our cost of funds. So we have not reduced deposit rates. We believe in protecting our margins,” she said. Of Bears and broken markets Alarm bells ring for India ‘Sub-prime write-downs may rise to $285 b’ ICICI Bank takes $264-m hit on overseas credit exposure More Stories on : Forex | Derivatives Markets | Financial Markets | Courts/Legal Issues | ICICI Bank Ltd
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