Fixed Deposit Rates Falling But Still Extremely Attractive
After the Reserve Bank of India (RBI) India’s central bark embarked on an ambitious interest rate easing cycle since October, slashing official interest rates by 350 basis points, Fixed Deposit (FD) rates have begun falling.
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SBI Postpones Merger Plan with Associate Banks
India’s Largest Lender, state owned State Bank of India has adopted a wait and see attitude towards the proposed merger with six associate banks. SBI chairman OP Bhatt said there were no further merger plans for the time being after having completed the merger with State Bank of Saurashtra (SBS).
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RBI Directs Banks To Quantify Satyam Exposure Whilst Citi Freezes Satyam Bank Accounts
India’s central bank the Reserve Bank of India (RBI) has asked for information from Indian banks and the Indian subsidiaries of international banks regarding their direct or indirect loan and equity exposure to financially tainted Satyam Computer Services, its related companies or subsidiaries.
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State Owned Banks Fear Rising NPA’s
The Finance Ministry expressed dissatisfaction with public sector banks yesterday and the level of credit delivery towards small and medium enterprises. The Ministry asked state owned banks on Monday to increase their lending to these types of firms as well as increase lending for automobile and housing. Banks are reluctant to comply however fearing deterioration in credit quality if they cede to the governments wishes.
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Banks In Denial Over Satyam Exposure
Currently the Indian banking sector seems to be in denial mode about potential exposure to Satyam Computer Services, with most lenders rushing to deny any exposure or to state that whatever exposure they do have is not material.
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Bank Interest Rates Expected To Tumble Over Coming Months
State Owned banks are expecting to lower their lending rates even further in February. Currently benchmark prime lending rates of state owned banks range between 12 and 13.25 per cent and some public sector banks have cut their lending rates three times since the RBI started its interest rate easing cycle.
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SBI to Raise Over $ 1Billion Selling Long Term Bonds To Retail Investors
India’s largest financial institution, the state owned State Bank of India (SBI) has decided it will raise Rs 5000 crore or US$ 1.04 billion by issuing Upper Tier 2 Bonds to retail investors. SBI Chairman OP Bhatt announced the fund raising to reporters in Guwahati adding that it would be the first time in Indian banking history that bank would issue Tier 2 Bonds to individuals.
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Indian Banks Combined Exposure to Sub Prime Over US$ 1 Billion
A report commissioned by the Reserve Bank of India (RBI) suggests that Indian banks have a combined exposure of over US$ 1 billion or Rs 4,800 crore to five troubled global financial institutions including Lehman Brothers and AIG.
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Indian Banks Cut Deposit Rates, Bank Rates Set to Fall by Up To 5 Percent
Banks in India, led by Government owned State Bank of India are set to reduce their deposit rates by over 50 basis points by mid January, after another 100 basis point reduction in official lending rates effected on Friday by the Indian central bank the Reserve Bank of India (RBI).
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India Announces New Economic Stimulus Package
The Congress led Indian Government on Friday announced its second emergency monetary and fiscal stimulus package in just under a month, in an effort to support its previously fast growing economy in the face of a global economic slowdown, and counter a sharp fall in global demand.
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