The Union Cabinet on Friday approved a proposal to allow the Reserve Bank of India (RBI) to provide liquidity to Industrial Development Bank of India Ltd. (IDBI), and to give loans to non-banking finance companies (NBFCs), Home Minister P Chidambaram said.
The move follows the Government’s January 2 decision on a second fiscal stimulus package allowing banks to give loans to cash starved NBFCs, Chidambaram told reporters in New Delhi.
Inflation, as measured by the wholesale price index (WPI), fell to a fresh 10-month low, slipping below 6% for the first time since February 2008, as prices of various primary and manufactured products declined.
The annual, point-to-point inflation stood at 5.91% for the week ended Dec. 27, 2008 as against 6.38% in the previous week, the Commerce Ministry said in a statement. It was expected to fall to around 6.10%. Inflation had reached 12.91% in Aug. 2008.
The annual inflation rate was 3.83% during the corresponding week of the previous year.
The WPI for "All Commodities" stood at 229.50 versus 230.2 in the previous week.
The index for "Primary Articles" was 247.50 compared to 248.80 in the week ended Dec. 20, 2008. The index for "Fuel & Power" remained constant at 330.50. The index for "Manufactured Products" stood at 200.80 as against 201.40.
The Indian economy is expected to grow 7% in the current fiscal year despite the global slowdown, and will maintain a strong pace of expansion in coming years, Prime Minister, Dr. Manmohan Singh, said on Thursday.
"Despite the global economic downturn, the fundamentals of the Indian economy continue to remain strong. We expect to achieve a growth rate of about 7% this year which will be among the highest in the world," Manmohan Singh said in Chennai.
The Indian economy expanded by 7.6% in the September quarter. The Government advisers and officials expect expansion to moderate to around 7% this fiscal year.
"Much of India's growth is internally driven, and I expect we can maintain a strong pace of growth in the coming years that certainly will be our ambition," Dr. Singh said.
Satyam Computer Services Ltd. on Wednesday announced that B. Ramalinga Raju, Chairman of the company has resigned from the Board of Directors.
The company has submitted a copy of communication sent by Ramalinga Raju, addressed to the Board, with the stock exchanges, capital market regulator SEBI and senior leaders of the company.
Satyam said that it is also in receipt of resignation tendered by Rama Raju, Managing Director of the company who will continue in the position only till such time the current Board is expanded and the continuance is just to ensure enhancement of the Board over the next several days or as early as possible.
Shares of Satyam have tumbled by over 37% to Rs112. The scrip plunged to an intra-day low of Rs108 after hitting an intra-day high of Rs188. The stock recorded volumes of over 3,00,00,000 shares on NSE.
Satyam has informed that DSP Merrill Lynch has terminated its engagement with the company. Merrill Lynch was entrusted with the task of finding a strategic option for the company in the wake of the controversial withdrawal of the plan to acquire two promoter group companies.
The Centre will borrow Rs 50,000 crore from the market, Rs 15,000 crore more than planned in December, in the last quarter of this fiscal to offset the impact of stimulus packages, aimed at reviving a slowing down economy, on government coffers.
The Reserve Bank on Tuesday came out with a revised indicative calendar for the fourth quarter of 2008-09 in supersession of the borrowing programme announced on December 5.
The earlier borrowing programme was for Rs 35,000 crore in the last quarter, whereas the government will raise Rs 50,000 crore from various dated securities as per the new schedule.
"Consequent upon the approval of the second supplementary demands for grants by Parliament and the fiscal stimulus packages announced by the government, it has become necessary for the government of India to raise additional resources," RBI said in a release.
The Congress party Monday said the government has decided to inject Rs.1 trillion (Rs.100,000 crore) in association with the private sector in the Indian economy to stimulate internal demand to insulate it from the effects of global recession.
"In the next 100 days, the United Progressive Alliance (UPA) government has decided to inject Rs 1 trillion in the Indian economy to stimulate internal demand to keep it insulated from the world recession. This would be done in association with the private sector," Manish Tewari, Congress spokesperson, told reporters.
Tewari said the decision was taken on the advice of UPA chairperson Sonia Gandhi.
"UPA has taken the decision to provide stimulus to the Indian economy on the advice of Sonia-ji. This is to increase productivity, control inflation and increase employment opportunities," he said.
Tewari also said the UPA government has been successful in not letting the world recession impact the Indian economy.
"The UPA government has acted as a wall against the world economic recession and hasn't let it impact the Indian economy. We have been able to manage average growth rate of 8.9 percent during the period of 2004-2009 against 5.8 percent during the National Democratic Alliance regime (1999-2004)," Tewari said.
The government today released Rs 800 crore to be paid to exporters as duty drawback and refund of central sales tax giving them a major relief in the face of credit crunch due to the global meltdown.
Simultaneously, the Directorate General of Foreign Trade (DGFT) also started putting the stimulus package into operation for exporters by hiking the duty refund rates and restoring them to the level before November 5, 2008, when the reimbursement was cut.
A sum of Rs 600 crore was dispatched to the regional authorities of the DGFT for clearing payment of the terminal excise duty and duty drawback under the deemed export scheme, official sources said.
Another Rs 200 crore were sent to the Development Commissioners of the special economic zones for the payment towards the Central Sales tax in respect of supplies made to 100 per cent export oriented units.
As promised in the second stimulus package unveiled on January 2, 2009, the DGFT notified extension of the popular Duty Entitlement Pass Book scheme for refund of taxes to exporters, till December, 2009.
The government had cut the tax refund rates for exporters in November after rupee appreciated fast to give higher realisations. However, with the worsening of the global markets, mainly the US and Europe, exports have started contracting putting lakhs of jobs at risk.
Concerned over the plight of exporters and the employment stakes in the sector, the government in the second stimulus package announced restoration of the DEPB benefits taken away in November last year.
The new set of measures to be announced by the Obama government may be worth as much as US$775bn, according to a Democratic aide
US president-elect Barack Obama is believed to be looking for US$300bn in tax cuts, as part of the new regime's fiscal stimulus package to lift the world's biggest economy out of the current mess. Tax cuts make up 40% of the new stimulus plan, according to reports.
The new set of measures to be announced by the Obama government may be worth as much as US$775bn, according to a Democratic aide. Making tax cuts such a large part of the stimulus may help win support from congressional Republicans, say some experts.
Obama plans to alter tax-withholding rules, rather than give out rebate checks as was done by the Bush administration in its stimulus plan, so that workers would see an immediate increase in their take-home pay.
Lawmakers and Obama say it is imperative for legislation to be passed to perk up the US economy, which is going through its worst slump in several decades and could deteriorate further without significant fiscal stimulus.
Obama plans to discuss his tax cut and stimulus package plans with Democratic and Republican leaders of the Senate and House of Representatives on Monday, according to reports.
Interest rates are set to fall by up to five percentage points in the next six months as inflation is moving towards zero level, a situation that will make India a low-cost economy and a winner globally, ICICI Bank CEO and Managing Director K V Kamath said on Sunday.
"All I can say is that four-to-five percentage points correction in interest rates from where it is today...this correction, I think, will be by July...this is where the interest rates are tending in six months from now," Kamath said in an interview.
Crystal-gazing the economy for 2009, ICICI Bank chief said, "Not from quarter starting April. But, I would think that interest rates would head towards single-digit levels from the quarter starting July. I clearly see that happening."
Kamath, however, declined to comment on what the lending rate of ICICI Bank, in particular, would be by that time, or whether his bank would lead the plunge in interest rates. ICICI Bank's PLR currently stands at over 16 per cent.
Apart from the price-line moving southward, the trend of declining rates for bank deposits and falling rates of bonds in Indian market would help banks bring down the cost of credit to the industry.
There is good news in store for companies and other borrowers as the government has directed the PSU banks to lend in the next three months Rs 56,000 crore, over and above their existing disbursement target.
Beyond March, the banks would be asked to further step up lending as the government plans to infuse over the next two fiscals Rs 20,000 crore, thus enhancing banks' loan disbursement capacity.
"We have three months more... we have enhanced the original (bank's credit disbursal) plans by Rs 56,000 crore. So we are planning to provide, in addition to the earlier plans, over Rs 56,000 crore," according to Finance Secretary Arun Ramanathan.
The addition lending would be around 20 per cent of the credit disbursed by all commercial banks during the first nine months of this fiscal. Banks have disbursed about Rs 2,75,000 crore to non-food sector up to December 19.
The target enhancement will benefit all sectors, including real estate, corporate, small and medium enterprises and non-banking financial companies, said Oriental Bank of Commerce Executive Director S C Sinha.
The decision of the government follows the announcement of the RBI to further reduce the key policy ratios and rates to unlock more bank funds and signal soft interest rate regime to neutralise the impact of the global financial turmoil on the economy.
The RBI has since October released Rs 3,20,000 crore into the system, but unless the banks shed their reluctance to the lend, the benefits will not reach the industry.
The reduction in reverse repo, the interest that banks earn by parking their funds with RBI, by 100 basis points will prompt the banks to look for borrowers to earn higher returns, Sinha said.
The Government on Friday announced the second round of its fiscal stimulus package to bolster India's economic growth amid a deepening gloom across the world in the wake of the worst financial crisis since the Great Depression.
With a view to further liberalizing the policy on External Commercial Borrowing (ECB), the Government and the RBI have decided:
(a) The ‘all-in-cost’ ceilings on such borrowing would be removed, under the approval route of RBI. The decision would be reviewed after June 30.
(b) To facilitate access to funds for the housing sector, the ‘development of integrated townships’ would be permitted as an eligible end-use of the ECB, under the approval route of RBI.
(c) NBFCs, dealing exclusively with infrastructure financing, would be permitted to access ECB from multilateral or bilateral financial institutions, under the approval route of RBI. The decision would be reviewed after June 30.
(d) In order to give a boost to the corporate bond market, FII investment limit in rupee denominated corporate bonds in India would be increased from US$6bn to US$15bn.
The flow of credit to the economy will be further enhanced by the following steps:
(i) An SPV will be designated shortly to provide liquidity support against investment grade paper to Non Banking Finance Companies (NBFCs) fulfilling certain conditions. Details will be announced separately. The scale of liquidity potentially available through this window is Rs.25,000 crores.
(ii) An arrangement will be worked out with leading Public Sector Banks to provide a line of credit to NBFCs specifically for purchase of commercial vehicles.
(iii) Credit targets of Public Sector Banks are being revised upward to reflect the needs of the economy in the present difficult situation. Government will closely monitor, on a fortnightly basis, the provision of sectoral credit by public sector banks.
(iv) Special monthly meetings of State Level Bankers’ Committees would be held to oversee the resolution of credit issues of micro, small and medium enterprises by banks. Department of MSME and Department of Financial Services will jointly set up a Cell to monitor progress on this front. Matters of MSMEs remaining unresolved with the Banks- SME Helpline for more than a fortnight may be brought to the notice of this Cell.
(v) Recently the guarantee cover under Credit Guarantee Scheme for micro and small enterprises on loans was extended from Rs.50 lakh to Rs.1 crore with a guarantee cover of 50%. In order to enhance flow of credit to micro enterprises, it has been further decided to increase the guarantee cover extended by Credit Guarantee Fund Trust to 85% for credit facility up to Rs.5 lakh. This will benefit about 84 per cent of the total number of accounts accorded guarantee cover.
State Governments are facing constraints in financing expenditure because of slower revenue growth. To help maintain the momentum of expenditure at the state government level, states will be allowed to raise in the current financial year additional market borrowings of 0.5% of their Gross State Domestic Product (GSDP), amounting to about Rs 30,000 crore, for capital expenditures.
India Infrastructure Finance Company (IIFCL), which has already been authorized to raise Rs.10,000 cr. through tax free bonds by 31.03.2009 for refinancing bank lending of longer maturity to eligible infrastructure bid based PPP projects, will be accessing the market next week for raising the first tranche of the amount. This will enable the funding of mainly highways and port projects on hand of about Rs.25,000 crore. To fund additional projects of about Rs.75,000 crore at competitive rates over the next 18 months, IIFCL is being enabled to access in tranches an additional Rs.30,000 crores by way of tax free bonds once funds raised in the current year are effectively utilized.
Exporters are especially hit by recessionary conditions globally. To support exports a number of steps have been taken. As a further measure:
(i) Taking into account the fact that the rupee has appreciated nearly four per cent against the dollar since November 2008, it has been decided to restore DEPB rates to those prevailing prior to November 2008. In order to provide predictability and stability of regime in the short term for future contracts, the DEPB Scheme would be extended till 31.12.2009.
(ii) Duty drawback benefits on certain items including knitted fabrics, bicycles, agricultural hand tools and specified categories of yarn are being enhanced. These changes will take effect retrospectively from September 1, 2008.
(iii) Exporters have raised a number of procedural issues where modification of procedures could reduce delays faced by exporters. To consider these and similar problems, Government has decided to constitute a Committee under the chairmanship of the Finance Secretary including Secretaries of the Departments of Revenue and Commerce to look into and resolve these issues on a fast-track basis.
(iv) EXIM Bank has obtained from RBI a line of credit of Rs.5000 crore and will provide pre-shipment and post-shipment credit, in rupees or dollars, to Indian exporters at competitive rates.
Other measures designed to counter recessionary trends are the following:
(i) Exemptions from CVD on TMT bars and structurals, and from CVD and Special CVD on cement, which were given to contain inflation, are being withdrawn. Full exemption from basic customs duty on zinc and ferro alloys, which was also provided to contain inflation, is being similarly withdrawn.
(ii) GOI will work with State Governments to encourage them to release land for low income and middle income housing schemes.
(iii) States, as a one time measure up to 30.06.2009, will be provided assistance under the JNNURM for the purchase of buses for their urban transport systems. A scheme towards this end will be announced shortly.
(iv) Accelerated depreciation of 50% will be provided for commercial vehicles to be purchased on or after 1.1.2009 up to 31.03.09.
The Government is closely monitoring its spending to expedite the pace of expenditure for all schemes and programmes. Government will set up a fast track monitoring committee to ensure expeditious approval and implementation of central projects. Chief Ministers are being advised to do the same.
The measures outlined above taken together with steps taken earlier constitute a substantial counter-cyclical stimulus in the current year. Government does not envisage any further measures in the current fiscal year. However, the Centre is aware that the measures required to provide an economic stimulus to the economy have to extend beyond the current financial year. Towards this end, it is finalising Plan and Non-Plan expenditure that will be required in the next financial year to maintain the tempo.
The Plan for the next year will include proposals for recapitalization of the public sector banks. The recapitalization is expected to be of the order of Rs.20000 crore over the next two years. This will help to ensure that the banking system will not suffer from capital adequacy constraints in order to provide credit growth needed to sustain the economic momentum in 2009-10
The Reverse Repo rate cut by 100 bps to 4% while the Repo Rate has been reduced by 100 bps as well to 5.5%. The Cash Reserve Ratio is trimmed by 50 bps to 5%
On a review of current global and domestic macroeconomic situation, the Reserve Bank of India (RBI) has decided to take the following further measures:
The central bank will reduce the repo rate under the liquidity adjustment facility (LAF) by 100 basis points (bps) from 6.5% per cent to 5.5 per cent with immediate effect.
The RBI will also reduce the reverse repo rate under the LAF by 100 bps from 5.0 per cent to 4.0 per cent with immediate effect.
The cash reserve ratio (CRR) of scheduled banks will be cut by 50 bps from 5.5 per cent to 5.0 per cent from the fortnight beginning January 17.
The reduction in the CRR will inject additional liquidity of around Rs200bn to the financial system, the RBI said in a statement on its web site.
It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates, the RBI said. The central bank on its part would continue to maintain a comfortable liquidity position in the system, it added.
"The fundamentals of the Indian economy continue to be strong. Once the crisis is behind us, and calm and confidence are restored in the global markets, economic activity in India would recover sharply," the RBI said. "But a period of painful adjustment is inevitable."
Since mid-September 2008, the RBI has reduced the repo rate under the liquidity adjustment facility (LAF) from 9.0 per cent to 6.5 per cent, reduced the reverse repo rate under the LAF from 6.0 per cent to 5.0 per cent and the cash reserve ratio from 9.0 per cent to 5.5 per cent.
The cumulative amount of primary liquidity made available to the financial system through various measures initiated by the Reserve Bank is over Rs.300,000 crore. This sizeable easing has ensured a comfortable liquidity position starting mid-November as evidenced by a number of indicators. Since November 18, 2008, consistent with the policy stance, the LAF window has largely been in the surplus mode.
The overnight money market rate has consistently remained within the LAF corridor since November 3, 2008. The yield on the 10-year benchmark G-Sec has declined from 8.66 per cent on September 29, 2008 to 5.31 per cent on January 1, 2009
Bank of America Corp completed its purchase of Merrill Lynch & Co on Thursday, creating the largest US bank and perhaps one of the biggest challenges yet for longtime Chief Executive Kenneth Lewis.
The closing allows Bank of America to bypass JPMorgan Chase & Co and Citigroup Inc in size, giving it about $2.7 trillion of assets.
Bank of America had said it expected to issue 1.71 billion common shares, equal to $24.1 billion, plus 359,100 preferred shares in the merger. Merrill shareholders received 0.8595 of a Bank of America common share for each of their common shares.
The transaction, originally valued at $50 billion, came to fruition in the early morning of September 15, about an hour before Lehman Brothers Holdings Inc went bankrupt, and may have saved Merrill from a similar fate.
It ends more than 94 years of independence for Merrill, after a year when the five top Wall Street banks were bought, went bankrupt, or changed their business structures.
Lewis is swallowing Merrill's "thundering herd" of 17,000 brokers, which he has called the "crown jewel" of the acquisition. He is also absorbing Merrill's big investment bank, which by volume ranked fifth in debt and equity underwriting and third in merger advice in 2008, Thomson Reuters data show.
The combined company's brokerage, credit card, investment banking, mortgage and wealth management operations, plus its deposit base, will make it the nation's largest or close to it.
Bank of America also takes over Merrill's nearly 50 percent stake in the powerful money manager BlackRock Inc.
Retail investors may soon be able to approach any of the 57 banks registered with SEBI to apply for public issues without blocking their money unless they are alloted shares.
"As on date, there are 57 banks registered with SEBI...to act as Self Certified Syndicate Bank for the purpose of (accepting) Applications Supported by Blocked Amount," SEBI said in a statement.
Applications Supported by Blocked Amount (ASBA) is an alternative payment system whereby retail investors are to part with their money only when they are alloted shares of public offers.
But these banks would be eligible to act as entities under the new system only after they submit a self- certification that they have undertaken the mock run of their systems with the stock exchanges and registrars to the issues.
At present, there are only 16 banks, including SBI, ICICI Bank and HDFC Bank, eligible for this purpose.
The new system, which runs parallel to the existing one, allows investors to apply for public issues, keeping the application money in their bank accounts till the finalisation of the allotment.
The new system will help retail investors whose IPO application money is often blocked for weeks even when they are not allotted shares.
The investors would benefit because they would not have to pay anything upfront. So, the cash would not be required to be paid immediately.
This process will also do away with the refund process and will also shorten the time between a public issue and its listing, since listing happens only after refunds are done.
Vadodara-based 20 Microns Ltd was the first company to come out with an initial public offer (IPO) through the new system.
Investors, in the US and otherwise, are anxious about US President-elect Barack Obama’s inaugural speech on January 20, as it would determine the direction of the global stock markets for the rest of 2009. The speech itself may not have much by way of measures Obama would take but is expected to outline the policy measures and initiatives that his government would take.
To get the financial system working, the US government needs people to start spending and investing. In other words, the government needs to instill confidence.
To survive and grow, financial system needs a constantly increasing capital flow. As long as more capital enters the system than leaves it, the system functions. As soon as new capital shrinks, the whole system breaks down.
As long as we can find new capital to pay interest on our existing debts, the system works. When capital dries up and we can't make our payments, the system crashes. This is what happened to global markets in October.
Making credit cheap was US Federal Reserve Chairman Ben Bernanke and Treasury Secretary Paulson's first response to the crisis. In an attempt to avert the credit crisis, world's major central banks cut interest rates and expanded money supplies. Problem is that, these measures only encourage people to borrow but they failed to support spending.
India's merchandise exports fell for a second month in a row in November, as recession in the country's leading trading partners - the US and the UK and EU - led to lower demand for its products. Indian exports declined in October, marking the first monthly fall in five years.
Exports during November 2008 were down 9.9% at US$11.5bn while imports too slowed sharply to US$21.57bn, up only 6.1% over the same month last year after crude oil prices collapsed from a record high. Imports had been growing at a brisk pace till October.
As a result, the trade deficit for the month stood at US$10.07bn as against US$7.56bn in November 2007. The trade deficit had reached a high of US$13.94bn in August mainly on account of high crude oil prices.
In rupee terms, exports were up 12% at Rs563.74bn, while imports increased by 31.8% to Rs1.05 trillion.
Oil imports during November 2008 were up 11.9% at US$7.25bn while non-oil imports during the month were up only 3.4% at US$14.32bn. Oil imports started dropping from August when they recorded a sharp increase of a whopping 77%. Non-oil imports started falling from September.
Exports during April-November 2008 were up 19.4% at US$119.3bn while imports jumped 33% to US$203.64bn, resulting in a trade gap of US$84.34bn compared to US$53.19bn during the year-ago period.
In rupee terms, exports grew by 29.5% to Rs5.24 trillion while imports surged 44.7% to Rs8.97 trillion.
During the first 10 months of the current fiscal year, oil imports were up 55.7% at US$74.11bn while non-oil imports rose 22.8% to US$129.53bn
India's wholesale price index rose 6.38 per cent in the 12 months to Dec. 20, below the previous week's annual rise of 6.61 per cent, government data showed on Thursday.
It matched a median forecast in a Reuters poll of analysts. The annual inflation rate was 3.74 percent during the corresponding week of the previous year.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
India's fiscal deficit overshot the annual target by a wide margin in the first eight months of the current fiscal year, raising concerns about the Government's worsening finances as it tries to pump-prime a slowing economy.
The budget deficit stood at Rs1.76 trillion at the end of November as against the annual target of Rs1.33 trillion, data released by the Government revealed. Fiscal deficit was 63.8% of the annual target in the same month last year.
The deficit is the amount the government needs to borrow to bridge the difference between spending and non-debt receipts. A wider budget deficit may lead to higher government borrowing, preventing a decline in interest rates.
The budget deficit in the year to March 2009 is estimated at 2.5% of the gross domestic product (GDP) as against 2.8% in the previous fiscal year.
India may fail to meet the budget-deficit target for the year ending March 31 because of a global crisis that has forced the Government to borrow and spend more, former Finance Minister P. Chidambaram said on Oct. 22.
ICICI Bank on Wednesday announced a reduction of 0.50% in its Benchmark Advance Rate (I-BAR). The revised I-BAR will be 16.75% p.a. as against 17.25% p.a. at present.
It also announced a reduction in interest rates for various tenors of retail Fixed Deposits by 0.50% to 0.75%.
Separately, ICICI Bank announced a reduction of 0.50% in its Floating Reference Rate (FRR) for home loans with effect from December 31, 2008.
The revised FRR will be 13.75% p.a. as against 14.25% p.a. at present. All existing home and auto loan customers on floating interest rates will benefit from this reduction.
The Federal Reserve on Tuesday announced that it expects to begin operations in early January, under the previously announced program to purchase mortgage-backed securities (MBS) and has selected private investment managers to act as its agents in implementing the program.
Under the MBS purchase program, the Federal Reserve will purchase MBS backed by Fannie Mae, Freddie Mac, and Ginnie Mae; the program is being established to support the mortgage and housing markets and to foster improved conditions in financial markets more generally.
There is a new big bull in the property market, the Life Insurance Corporation of India and that is snapping up big chunks of land parcels across India.
LIC has invested Rs 800 crore in land and commercial assets and land parcels across 10-11 cities. These assets have been acquired through auctions by the state government and large corporates.
LIC officials said that the investments were made largely to utilise the 5% limit allowed to invest incremental premiums. The premium collections upto October 2008 has been Rs 21,874 crore. This investments in property is aimed at owning offices and moving away from rentals and the properties will be used to build housing facilities for employees.
At the pre-bid conference on 23 December 2008 for auction of 3G and BWA spectrum, a large number of stakeholders requested for more time to study the Information Memorandum issued on 12th December 2008.
Based on the requests received during the pre-bid conference and thereafter and due to other administrative reasons, the timeline specified in para 1.1.11 of the Information Memorandum (IM) dated 12th December 2008 is revised as under:
The queries/questions raised by the participants on the auction process and rules during the pre-bid conference and those being received via e-mail are being clarified and will be posted on DOT website in due course.
Punjab National Bank has decided to reduce the BPLR by 50 bps from 12.50% p.a. to 12% p.a. w.e.f. January 01, 2009.
The revised BPLR shall be applicable in respect of all existing and new accounts for Loans & Advances linked with BPLR.
The bank has also decided to reduce peak deposit rate from 9.50% p.a. to 8.50 %p.a. for deposits of 1 year to less than 3 years. Accordingly, interest rates in the time buckets having maturities of 46 days and above have also been reduced by 25 bps to 125 bps w.e.f. January 01, 2009.
The Bank has also reduced interest rates on various retail lending schemes like Floating Rate Housing Loans, Car and Education Loans by 50 bps. The interest rates on Fixed Rate Housing Loans have been reduced upto 175 bps.
Further, the Bank has introduced a new Housing Loan scheme i.e. "PNB Special Housing Loan Scheme" for new accounts from January 01, 2009 till June 30, 2009. Under this scheme interest @ 8.5% will be charged under fixed housing loan upto Rs 5 lacs for maximum period upto 20 years and 9.25% interest for fixed rate housing loans of above Rs 5 lacs to Rs 20 lacs for a maximum period upto 20 years.
The interest rates will be subjected to reset on July 01, 2014 for the scheme.All revised rates will be applicable w.e.f. January 01, 2009.
The direct tax revenue from companies and personal incomes rose 11.5% between April and December to Rs2.32 trillion, according to a business news channel.
The advance tax payments made by companies fell by 2.6% between April and December to Rs1.13 trillion, the news channel
The Reserve Bank of India will release its scheduled quarterly review of monetary policy on Jan. 27, according to the reports.
Duvvuri Subbarao, Governor of the Reserve Bank of India will meet the chiefs of major commercial banks at 11 a.m. on that day, the central bank announced.
India's inflation, as measured by the wholesale price index (WPI), fell further in the second week of this month, increasing the possibility of the RBI to push interest rates lower in order to boost economic growth.
The annual point-to-point inflation declined to 6.61% for the week ended Dec. 13, as against 6.84% in the previous week, the Commerce & Industry Ministry said today. This was slightly higher than the average forecast of 6.59%.
Industrial production in Japan shrank in November at a record pace, as companies slashed output and cut jobs to ward off the threat from the worst financial crisis in several decades.
Separately, core consumer prices fell faster than forecast, putting the Japanese economy on course for another spell of deflation.
The grim data could push the Bank of Japan (BOJ) to implement unconventional monetary easing measures as it has little room left to cut interest rates after reducing them to 0.1% to 0.3% last week.
Factory output plunged 8.1% in November from October, the Trade Ministry said today. This was the largest fall on record and exceeded a median forecast for a 6.8% drop.
Industrial output is expected to fall a further 8% in December and 2.1% in January, data from the Ministry of Economy, Trade and Industry showed today.
Reliance Petroleum today created history when it commissioned an only-for-export refinery in just 36 months at rock-bottom prices to create the world's largest refining hub at Jamnagar in Gujarat. RPL commissioned a 580,000 barrel a day (29 million tonnes a year) refinery adjacent to its parent Reliance Industries' existing 33 million tonne per annum refinery.
The two units together will be the world's largest refining complex with an aggregate processing capacity of 1.24 million barrels of oil per day. The USD 6 billion new unit, built in a Special Economic Zone (SEZ), is one of the most complex refineries in the world, capable of processing the most difficult crude oils.
"RPL commenced its crude processing (today). The secondary processing units are now under synchronisation and commissioning.
The entire refinery complex is expected to attain full capacity shortly," the company said in a press statement here. The refinery will export the fuel, compliant with the most stringent Euro IV norms, to the US and European and African countries.
The company, however, did not say when full commissioning would take place. Sources said it may take up to three months for a unit of that size to become fully operational.
Reliance Industries' existing refinery began the trial run in July 1999 and was fully commissioned in October that year. The crude distillation unit (CDU), the front end of a refinery which converts crude oil into various products like naphtha, kerosene, diesel and petrol, was started today and it normally takes 8-10 days for the first product to be ready for delivery, sources said, adding that it (the first product) would be in the market by early January
The spending figure, which applies to the fiscal year beginning April 1, 2009, is a 6.6% increase from the initial budget for the current fiscal year,
Japanese Government on Wednesday approved a record 88.55 trillion yen (US$980bn) budget for the next fiscal year. This package includes hefty stimulus, specially designed to bolster the world's second-biggest economy.
The spending figure, which applies to the fiscal year beginning April 2009, is a 6.6% increase from the initial budget for the current fiscal year.
Prime Minister Taro Aso and his Cabinet are due to present the new budget to parliament around January 19. The Cabinet will also present the already-approved 4.79 trillion yen second budget for the current year to parliament on January 5
The Railways has generated Rs. 336.39bn of revenue earnings from freight traffic during April-November 2008 as compared to Rs. 294.17bn during the corresponding period last year, registering an increase of 14.35%.
Railways carried 534.60 mn tonnes of freight traffic during April-November 2008 as compared to 502.19 mn tonnes carried during the corresponding period last year, registering an increase of 6.45%.
The Net Tonne Kilo Metres (NTKM) went up from 321467 million during April-November 2007 to 345150 million during April-November 2008, showing an increase of 7.37%.
Of the total earnings Rs. 40.82bn during November, Rs. 16.579bn came from transportation of 31.33 million tonnes of coal, followed by Rs. 498.70 crore from 8.18 million tonnes of iron ore for exports, steel plants and for other domestic user, Rs. 3.68bn from 7.09 million tonnes of cement, Rs. 3.113bn from 4.23 mn tonnes of fertilizers, Rs. 252.50 crore from 3.12 million tonnes of petroleum oil and lubricant (POL), Rs. 2.021bn from 1.83 million tonnes of Pig iron and finished steel from steel plants and other points, Rs. 2.26bn from 2.38 million tonnes of foodgrains Rs. 54.97 crore from 0.81 million tonnes of raw material for steel plants except iron ore, Rs. 182.28 crore from 2.24 million tonnes by container service and Rs. 3.289bn from 5.41 million tonnes of other goods.
Union Textiles Minister Shankersinh Vaghela said on Tuesday that the biggest achievement of the UPA Government was to turnaround the Indian textiles from a 'Sunset' sector to a 'Sunrise' sector. He said this while interaction with the media. The rationalization of fiscal duties undertaken during the last four years has also provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry.
The Minister said that the textiles sector has witnessed a spurt in investment during the last four years and the investments between 2004-08 were Rs1085.31bn and they are expected to touch Rs1506bn by the year 2012. This enhanced investment will generate 17.37 million jobs.
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