The Hindu Business Line : Financial markets closed; banks operate with skeleton staff

Mumbai, Nov. 27 The financial capital of the country had a virtual holiday on Thursday, following the terror attacks in Mumbai. The equity, currency, bond and money markets were officially closed.

However, the Reserve Bank of India, the SEBI and commercial banks were functioning, although the staff turnout and customer turnout was very low. Due to this, many of the bank branches in the South Mumbai area were closed earlier than normal.

Clearing operations functioned normally as banks catered to the requirements of their clients in other centres, said bank officials.

The RBI carried out transactions under Liquidity Adjustment Facility in order to help banks maintain their liquidity requirements.

A press release issued by RBI said, “Settlement of all outstanding transactions will, accordingly, get postponed to the next working day, November 28, 2008. Transactions under Liquidity Adjustment Facility (LAF) conducted on November 26, 2008 will accordingly be reversed on November 28, 2008.”

Union Bank of India’s branch at Nariman Point was closed as it is very close to Oberoi Hotel, one of the spots of terror attacks. But other branches were open, although customer inflow was much less, said a senior official in-charge of operations. Similarly, HDFC Bank’s branch located just behind the Taj Hotel was the only branch of the bank to remain completely shut, said a spokesperson of the bank.

Bank branches in the suburbs functioned normally. In fact, branches in suburbs saw more customers as those who could not go to South Mumbai carried out transactions in suburban branches, said bank officials.

Branches of Bank of Baroda, Axis Bank, and Oriental Bank of Commerce, located around Nariman Point were also seen operating with minimal staff.

An official from Axis Bank’s branch in Churchgate said, “No customers came in today as most of them use the ATM.”

An official from Bank of Baroda’s Backbay branch said, “We closed the branch by afternoon today, as there was very few staff and just two to three customers came into the branch.” Some officials from Deutsche Bank were inside the Taj Hotel when the firing took place, but they were evacuated by Thursday morning, said a spokesperson from the bank.

Andhra Bank, which was supposed to hold its board of directors meeting at the Taj Hotel, deferred the meeting. Four of the directors were learnt to be within the hotel premises.

“Our RTGS and other clearing operations were normal as our branches in other cities are functioning and we have to meet the requirements of our clients there,” said Mr Moses Harding, Executive Vice-President, Head, Global Markets Group, IndusInd bank.

In the first one-day repo auction, under the LAF, the RBI received and accepted three bids for Rs 735 crore.

There were no repo bids. In the second auction, RBI received and accepted two repo bids for Rs 2,000 crore and four reverse repo bids for Rs 2,350 crore.

In the 14-day special repo auction, the RBI received and accepted one bid for Rs 150 crore.

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