RBI seen stepping up intervention of forex market
With the rupee continuing its relentless rise as foreign capital seeks out higher interest rates and strong fundamentals in India, banks and money market players expect the Reserve Bank of India (RBI) to intervene frequently in the foreign exchange market.
In 2010 so far, overseas investors have pumped in close to $23.18 billion into the Indian economy . On Friday, the Indian currency surged to its highest level since late August 2008,buoyed by record foreign portfolio investments and a shaky dollar. During the day , the rupee touched 43.95/96 against the dollar, its highest since August 29, 2008 and above its previous close of 44.11/12 on Thursday.
C Chandrasekhar, senior vice-president, Mecklai Financial said: "The RBI may come up with some kind of cap on the capital flows like many other countries have done. The bank will encourage more inflows on the long term. We believe this kind of strong gain in the rupee is temporary . It may go back to 44.50 levels soon."
According to V Balakrishnan, CEO, Infosys Technologies, a stronger rupee will hurt the company's operating margin by 1.5% and the year margin may narrow by 130 basis points.
By the information given by central bank country's foreign-exchange reserves rose by $1.6 billion to $295.8 billion in the weekended October 8. While foreign currency assets rose by $1.6 billion to $268 billion but gold reserves remained unchanged at $20.5 billion in the week.
If we go with Expert's believe that the impact of a stronger rupee will be seen in the next quarter since foreign inflows have been quite large in September and October on which RBI governor D Subbarao said on Friday that the bank was watching the exchange rate situation and will intervene in the forex market if inflows are lumpy and volatile.
Obama against tax sops for cos creating jobs overseas
US President Barack Obama said the US tax code shouldn’t benefit companies that create jobs in other countries, as he criticised Republicans for “rewarding corporations that create jobs and profits overseas.”
Obama said that “For years,our tax cde has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,but now We should be using our tax dollars to reward companies that create jobs and businesses within our borders.”
About 8 million jobs have been lost during the recession and the unemployment rate,after reaching a 26 year high of 10.1% in October 2009, was 9.6% last month. Obama said the nation remains in a “tough fight” to help the economy recover. He said government has an “important responsibility” to help business grow.
In the Republican address,U S Representative Mike Pence,o fI ndiana, said Congress should take immediate steps to extend current income-tax rates to remove doubts that are damaging the economy.
“No American should see a tax increase in January,and Republicans are determined to oppose any effort to raise taxes on any American in this difficult economy, ” Pences aid.
IOC hikes petrol price by 72 paise
This is the second increase in petrol prices since June this year. Now petrol in delhi will cost rs 52.55 a litre ater the hike and price in other cities will vary depending on local taxes and levies.
Indian Oil Corporation, the nation's largest fuel retailer, today hiked petrol prices by 72 paise a litre effective midnight tonight.
As there is increase in international oil prices which rose over 80$ per barrel due to which companies are having Rs. 1 per litre lose.
Oil companies no longer revise petrol prices intandem to avoid being accused of acting as a cartel. The other companies also do not have a uniform price for petrol with IOC selling the fuel three paise.
Sources said the three companies are losing about Rs 1 per litre on petrol after international oil prices rose to over $80 per barrel this month. The government had in June freed petrol pricing from its administrative control,allowing the state companies to fixratesinlinewiththecost of production.
Post-suicides, SKS Microfinance willing to cut loan rates
SKS Microfinance today said it is willing to reduce the rate at which it lends money, if the RBI or the government asks it to do so. The statement comes within hours of Andhra Pradesh promulgating Special Ordinance to rein in microfinance institutions (MFI) in the state.
SKS Microfinance Founder and Executive Chairman Vikram Akula said that "We are willing to reduce our rate of interest if the RBI or Finance Ministry asks us to do so. We reduced rate of interest in the past, voluntarily. We are ready to lend at 24 per cent."
SKS Microfinance currently charges 26 per cent interest rate.The issue of capping of interest rate charged by MFIs has divided the stakeholders.
When asked about the ordinance, Akula said, "As an NBFC, SKS is under the purview of RBI and is regulated by it. The state government will have to take up (the issue) with RBI and Finance Ministry as far as interest rates are concerned."
Since the microfinancers take loans from the banks and lend it to customers at a hefty interest rate of as much as 36 per cent, the government is now insisting that public sector lenders must ask MFIs to cap their lending rates in the range of 20-24 per cent as a precondition to access bank finance.
CWG-2010: INDIAN HEROES MELDED INTO HISTORY
"THE GAMES belong to the athletes and athletes will perform." When 'gold-finger' Abhinav Bindra said this at the start of the 19th Com monwealth Games, we weren't in a position to predict a second place for India in the games and that the host nation would clinch its biggest-ever gold medal tally with its best performance ever. But the Indian contingent rose beyond all that to make their nation proud.
Be it the first Commonwealth gold for India in athletics after a yawning gap of 52 years, or the great medal haul in wrestling and shooting, or the inspirational display by the crisis-ridden hockey team that won its first-ever medal, a silver, at the CWG--it has been smiles all the way in the arenas. Picking up 101 medals in all at one single international sporting even was something of a dream till the start of CWG 2010 for this cricket-worshiping nation.
Even the Test series with Australia turned out to be an epic victory for the In cricket team, our athletes in the CWG ceived as much attention, interest and sup port from the spectators, if not more, as the men in blue of Indian cricket. If thinking beyond cricket was ever a problem in this country, it just wasn't so over these 11 days.
While these games would be remembered for rather avoidable reasons and controversies, spanning from corruption and delays in preparation to mismanagement of volunteers and from empty stands in the stadia to the mad scramble for tickets, they would also be remembered for the Indian contingent's stellar performance.
Govt could add loan products in fin inclusion plan
The government is planning to reach out to the unbanked segments in the country by including loan products under its financial inclusion plan, Department of Financial Services secretary R Gopalan said.
Earlier, Gopalan had reviewed the financial inclusion plan process that is being carriedoutby10PSUbanks intheSouthincludingIndian Bank, Andhra Bank, Corporation Bank, Canara Bank, Indian Overseas Bank, Syndicate Bank, Vijaya Bank, State Bank of Mysore, State Bank of Tranvancore and State Bankof Hyderabad. "Corporation Bank is already undertaking such initiatives by opening credit lines to unbanked segment customers to start small businesses like saloon and cycle shops by granting a small value loans of Rs 10,000 to Rs 15,000. This can be replicated by all banks after the ministry approves it at the national scale.
Finance minister also said "We are focusing on providing facilities including deposits, withdrawals, remittances, micropension, micro-insurance in the identified FIP pockets."
The banking sector is up against a huge HR challenge with about 3-4 lakh staff expected to retire in the next three to four years, he said. "New age banking workers has to reorient themselves for new situation. In the modern day banking, more work will be handled at the back offices with conventional banking adopting Business Process Re-engineering at the front-end to stay relevant. We need people with indepth skills in areas like Risk Management, Forex management, Treasury Management, Credit appraisal.,etc to meet the demands of the modern era banking".
Submitted By:
Kushal Shrivastava
Mahendra Singh
Manas Mishra
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