Business & Economy
RBI ups reverse repo:
interest rates to go up
What is India News Service, Friday, 29 April 2005,
1400 hrs IST
Interest rates across bank loan products are set
to rise. The economy was placed on alert on Thursday by the Reserve Bank of
India when it marked up the reverse repo by 25 basis points to five per cent,
while leaving the Bank Rate and CRR unchanged at six per cent and five per cent,
respectively.
The reverse repo rate is the return banks earn
on excess funds parked with the central bank against Government securities. In
moving up the rate in the Annual Policy Statement for 2005-06, the RBI Governor,
Dr Yaga Venugopal Reddy, intends to squeeze out loose cash from the system to
stall prices chasing consumer goods. Taking the cue, financial markets went
tight with yields on government securities going up. Banks that have tied their
lending rates to yields in the financial markets are expected to mark up the
price of retail and corporate funds while government borrowings turn costly.
The central bank has pegged the inflation rate
for the current fiscal between five per cent and 5.5 per cent, subject to the
growing uncertainties on the oil front, both with regard to global prices and
their domestic absorption. The economic growth for 2005-06 has been put at seven
per cent and is expected to be moderated by quotes in the oil crude markets,
which remain tight, RBI said in its annual policy statement.
"In India, the domestic factors dominate
and they all point to stability. Global factors point to risks in terms of oil
prices, interest rate movements and currency imbalances. With integration of
economies these risks become relevant. However, our vulnerability to global
risks will also be much lesser than the rest of the world," said Dr Reddy,
speaking at a press conference here today.
Among other measures in the Annual Policy
statement, RBI has proposed a screen-based negotiated quote-driven system for
all dealings in call/notice and term money transactions. From April 30, 2005,
all members on the Negotiated Dealing System (NDS) are required to report their
term money deals on the NDS platform.
Giving a hefty gift to Indian corporates, the
RBI has allowed them to invest up to 200 per cent of their net worth in overseas
joint ventures and wholly owned subsidiaries, under the automatic route, against
the earlier limit of 100 per cent.
No
oil price hike for now: Petrol and diesel prices will not be increased in
the immediate future, Petroleum Minister Mani Shankar Aiyar, told reporters here
on Thursday. The prices are due for a review on April 30.
Cosmetics labels \91unfair\92, face ban:
The Health Ministry is planning to ban cosmetics companies from carrying \91\91misleading claims\92\92 on the labels of their products. The Ministry will soon send notices to various cosmetics firms, asking them to either substantiate their claims or remove them from labels. According to Health Minister Dr Anbumani
Ramadoss, \91\91No company can make claims without proving them with scientific data.
TDSAT
quashes TRAI's order on int'l bandwidth:
In a setback to Trai, Telecom Dispute Settlement and Appellate
Tribunal TDSAT on Thursday set aside the order on price reduction of
international bandwidth which was challenged by VSNL.
Plans afoot to increase
agri-credit flow by 30%: RBI has proposed to undertake a slew of measures to boost the flow of credit to the entire priority sector, including agriculture, micro-finance and small and medium enterprises.
Reliance
shares undervalued: AnilL Stepping
up the attack on his elder brother Mukesh Ambani, Reliance Industries'
vice-chairman and managing director Anil Ambani on Thursday said shares of all
group companies were "usually under-valued" because of absence of
corporate governance and lack of transparency.
Liquidation veil over weak
UCBs: The Reserve Bank of India made it clear today that the weak urban cooperative banks will be liquidated if the banks\92 financial condition worsens and managements start siphoning off funds from the banks. [ full story ]
Bharti profit jumps 135%:
Bharti Tele-Ventures Limited has recorded a 135 per cent increase in annual net profit to Rs 1,439 crore from Rs 619 crore in 2003-04, even as revenues grew 61 per cent to Rs 8,035 crore. [ full story ]
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