The Cabinet sub-committee of the Maharashtra Government headed by the Deputy CM, Mr. Gopinath Munde, to look into the Dabhol Power Company deal, after going through seven terms of reference, has concluded that “having examined the issues and having listed the deficiencies is unanimously of the view that the arrangement in force is not tenable due tothe infirmities pointed out in the terms and conditions of the contract. It therefore recommends that phase- II of the project should be cancelled and phase-I should be repudiated.”

RBI sets terms on FIs for Euro issue deposits

The Reserve Bank of India has imposed statutory reserve requirements on FIs and banks accepting foreign currency deposits from Indian corporates out of their Euro issue proceeds. FIs and banks accepting such deposits usually for short maturities will now have to maintain a Cash Reserve Ratio (CRR) of 7.5 per cent on them. Further, they will also not be allowed to swap the foreign currency for rupees. Bankers here interpreted this step by the central bank as an effort to check money supply and also a possible appreciation of the Indian rupee.

Cotton exports in jeopardy

Raw cotton exporters are encountering rough waters as international buyers appear hesitant to open letters of credit, according to market sources. Sources say Indian exporters are finding it difficult to execute export quotas negotiated at prices which were 30 per cent higher than the current prices, in the international markets. Senior officials of the Cotton Corporation of India (CCI) dispute the fact. It may not necessarily mean that buyers are giving the contracts a second thought, they opine.

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