The Hindu Business Line : Weekly News Round-up

In yet another set of measures to further boost liquidity and enhance credit flow, the Reserve Bank of India eased prudential norms for banks' exposure to sensitive sectors such as the capital market and commercial real estate.

The provisioning requirement for banks on standard advances in the commercial real estate sector, personal loans, and capital market exposure and NBFCs has been reduced to 0.40 per cent from 2 per cent. RBI had earlier progressively increased this from 0.25 per cent to 2 per cent. The provisioning for home loans beyond Rs 20 lakh has also been reduced to 0.40 per cent, from 1 per cent.

After Government employees, it is now the turn of public sector executives to reap the pay revision bonanza. On Thursday, the Union Cabinet gave its nod to a pay enhancement for officers of Central Public Sector Enterprises. This will be implemented with retrospective effect from January 1, 2007.

The Central Public Sector Enterprises will bear the entire burden of hike in wages, and allowances. The new pay-scales would be based on recommendations given by the Second Pay Revision Committee.

The annual Wholesale Price Index-based inflation rose 8.9 per cent during the week ended November 8, marginally below the previous week's annual rise of 8.98 per cent. The dip in the headline inflation rate was mainly on account of a dip in inflation levels in case of the fuels group. The annual inflation rate was 3.20 per cent during the corresponding week of the previous year.

The rupee again crossed the psychologically important level of 50 this week, pulled down by negative sentiments in the equities market and on non-deliverable forward arbitrage. Three weeks ago, the rupee had breached the 50-level but had gradually recovered in the subsequent days.

The domestic currency opened on Monday at 49.10/12 and touched a low of 50.60 on Thursday, and later on Friday, the currency recovered partly to close at 50.03/05 due to selling by foreign banks as they unwound their long positions.

IT solutions firm Mastek Ltd is in the process of closing down its business process outsourcing practice. In the last two years, the company had stopped pitching in for renewal of back office contracts and has significantly reduced the number of people in its BPO-specific team.

Maruti Suzuki on Wednesday launched its fifth World Strategic Model A-Star in India. With this new model, the company is eying an export market of around 1.5 lakh to two lakh cars annually by fiscal 2009-10. Last year the company exported around 53,000 cars to 40 countries.

The company has launched the new model in three variants with an ex-showroom price in the Capital in the range of Rs 3,46,775 to Rs 4,11,775.

As a part of its strategy to consolidate its leadership in the healthcare space, Royal Philips Electronics has acquired Mumbai-based Meditronics, a manufacturer of general X-ray systems for an undisclosed amount.

The Indian crude basket hit a fresh low at $45.50 a barrel on Thursday after touching a high of $142.04 a barrel on July 3. The Indian crude oil basket has averaged $52.78 a barrel so far this month, down over 23 per cent from October's average of $69.12.

The oil marketing companies are still saddled with crude procured in September-October when the Indian basket has averaged about $70-$100 a barrel, industry officials told Business Line. For July-September, the basket has averaged $114.41 a barrel. Current profit on sale of petrol and diesel will not be enough to wipe out the net losses the oil marketing companies have reported in the second quarter of the current fiscal.

Compiled by M J Madhavan
Podcast by S Vasudevan