RBI to issue Rs 500 notes packets in non-sequential order soon

Mumbai: The Reserve Bank on Monday said it will soon start issuing bank notes of Rs 500 denomination in packets, which may not be sequentially numbered, for easier transactions.

The measure has been announced to increase operational efficiency, the RBI said in a statement.

"With a view to enhancing operational efficiency and cost effectiveness in bank note printing at banknote presses, it has been decided to issue...fresh banknotes of Rs 500 denomination in packets which may not necessarily all be sequentially numbered," it said.

The apex bank said such kind of practice is prevalent in other countries.

"Packets of banknotes in non-sequential number will, as usual, have hundred notes," the statement said.

RBI said the bands of the packets containing the banknotes in non-sequential number will have the legend 'The packet contains 100 notes not numbered sequentially' to avoid any confusion.

Source: Financial Express

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MSF debut: Banks borrowed Rs 100 cr on Friday

Banks on Friday used the Reserve Bank of India's (RBI) marginal standing facility (MSF) for the first time since its inception in May. According to data released by the central bank on Monday, banks borrowed Rs 100 crore for three-day loans through the facility.

To borrow funds through this window, banks have to pay interest at a rate 100 bps higher than the repo rate, which currently stands at 7.25 per cent. Banks are allowed to use MSF only after exhausting the excess statutory liquidity ratio (SLR), which stands at 24 per cent of their net demand and time liabilities. Banks keep excess SLR to pledge securities for funds from the central bank or the overnight market to meet their product needs. In May, MSF had replaced the second liquidity adjustment facility (LAF).

Though RBI did not publish the names of banks that used MSF, according to market players, a few small private sector banks facing a liquidity crunch may have used the facility. “The amount borrowed was very low compared to the LAF borrowing on Friday. Maybe one or two small banks have used the window to sail over short-term needs,” said a treasury head of a large public sector bank. On Friday, banks borrowed around Rs 75,000 crore through the LAF window at 7.25 per cent.

Interestingly, though the call money rate, at 7.30-7.40 per cent, was stable last week, banks opted for MSF funds instead of the call market route. When MSF was announced, RBI had said it expected banks to exhaust all other sources before taking this route.

“Every bank has an internal limit set for borrowing from the call money market. Exhaustion of that limit would have forced a bank to approach RBI's marginal standing facility. Also, while lending call money, factors like the borrowing bank’s net worth, its market standing and its past experience in repaying the debt play major roles, since borrowing in call is non-collateralised,” said Pawan Bajaj, deputy general manager, Bank of India.

Liquidity is expected to remain tight due to the advance tax outflow scheduled later this week. Banks expect Rs 25,000 crore to Rs 30,000 crore to go out of the system owing to the tax outflow. RBI had earlier said the MSF would be tested when the tax outflow takes place.

“Every quarter, it (advance tax) happens. I don't think there is anything different in that. A new type of liquidity management facility has come, so it would be tested,” RBI Deputy Governor K C Chakrabarty had said in the beginning of June.

Source: Business Standard

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Transactions by cheques up marginally in April: RBI

Mumbai: Cheque transactions worth over Rs 8.66 lakh crore were carried out in the country during April, 2011, a growth of over 0.7 per cent from the same month last year.

Banks had cleared cheques worth almost Rs 8.60 lakh crore in April 2010, as per the latest data from the Reserve Bank.

However, the total number of cheques cleared during April fell by over 6.6 per cent as against the same month of last year.

A total of 1,097.5 lakh cheques were cleared by the banks during the month under review compared to 1,175.3 lakh in the corresponding month of 2010.

In April, the Mumbai region reported the highest number of cheque clearances. Banks cleared a total of 195.1 lakh cheques with a value of over Rs 1.49 lakh crore, it said.

This was followed by Delhi region which reported 129.3 lakh cheques being cleared with a total value of Rs 1.23 lakh crore. In third place was the Chennai region with 60.7 lakh cheque clearances worth over Rs 48,500 crore, it added.

The latest marginal rise in the value of transactions by cheques comes after banks reported a fall in numbers during the last fiscal.

The value of cheque transactions had declined by 2.6 per cent to Rs 101.33 lakh crore in 2010-11. Only Delhi and Bangalore, among the major centres, had reported a rise in value of clearances during the last fiscal.

However, the total number of cheques cleared by banks across the country had grown marginally by 0.4 per cent in 2010-11. Over 1.38 crore lakh cheques were cleared by banks across the country last fiscal as against 1.30 lakh in 2009-10.

Source: Financial Express

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Deutsche Bank India' net profit up 41%

New Delhi: Foreign lender Deutsche Bank today said its Indian banking operation has recorded a 41 per cent rise in net profit at Rs 630 crore for the fiscal ended March 2011.

The bank had a net profit of Rs 446 crore in 2009-10, Deutsche Bank said in a statement.

Total income of Indian operation of Germany-based bank increased by 19 per cent to Rs 2,861 crore from Rs 2,396 crore in the year ended March 2010.

At the same time, profit before tax grew by 43 per cent to Rs 1,190 crore as against Rs 833 crore in the previous fiscal.

During the year, the bank increased its capital base in the country by over Rs 330 crore, the fourth infusion since 2007, Deutsche Bank India Chief Executive Officer Gunit Chadha said in a statement.

With this Deutsche Bank's capital base in India rose to over Rs 5,500 crore thus making it one of the highest capitalised foreign banks in the country, he said.

"Our corporate and investment banking businesses have achieved market-leading positions in several verticals like equity capital markets, debt capital markets, customer foreign exchange and transaction banking," he said.

The bank's Capital Adequacy Ratio stood at 15 per cent while Gross Non Performing Assets (NPA) as a proportion of Gross Advances stood at 1.24 per cent at the end of March 2011.

However, it said, the results cover the performance of the Indian branches of Deutsche Bank and do not include results of other Deutsche Bank Group entities in India covering businesses relating to equity broking, asset management, primary dealership, corporate finance, outsourcing or the NBFC.

Source: Financial Express

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Andhra Bank to increase branches, double biz in UP

LUCKNOW: Expanding its base in Uttar Pradesh Andhra Bank has set a target of increasing its branches and double its business in the current fiscal.

"The bank plans to double its branches from existing 24 to 48 in this year, besides increasing our business to Rs 2,500 crore from existing Rs 1,225 crore," bank's Chairman and Managing Director R Ramachandran told reporters here.

Ramachandran along with bank's Executive Director Anil Girotra inaugurated the zonal office of the bank.

"The Andhra Bank is embarking upon the policy of expanding its branches in northern India and increase its visibility pan-India," he said.

Ramachandran said that UP offer tremendous opportunities and the bank would replicate its success formula in the state.

"The bank will concentrate on agriculture, small and micro enterprises, while expanding its barnch network to all most all the districts in the state," he said.

"Opening the zonal office for UP and MP is a step in this direction and it will expedite decision making process," he said, adding that the bank will open its branches in rural and semi-urban areas with concentration of financial inclusion.

Executive Director Girotra said the bank has identified places in western UP where it would set up its branches.

Source: EconomicTimes

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