Barclays CEO too resigns on interest rate scam

Barclays' senior management and multiple traders were involved in manipulating Libor and Euribor rates and the bank was slapped a 290 million pounds fine by the US and UK authorities


London: Barclays Plc on Tuesday said its chief executive officer Bob Diamond has resigned with immediate effect after increasing pressure to step down following global interest rate manipulation scandal, reports PTI.


The move follows the decision by Barclays Chairman Marcus Agius to quit yesterday, although he would stay in office until a succession plan is in place.


Both the executives had come under intense pressure to quit after the British bank was slapped with 290 million pound (about $451 million) fine by the US and the UK authorities to settle the charges of manipulating global benchmark lending rates.


Diamond, who has served as the company for 16 years, resigns as CEO and a Director of Barclays with immediate effect, Barclays said in a statement.


"...The external pressure placed on Barclays has reached a level that risks damaging the franchise ? I can not let that happen," Diamond said, adding that he was "deeply disappointed by the impression created by last week's events".


The bank said Agius would stay in his position until the hunt for a chief executive is completed. He would chair the Barclays Executive Committee pending the appointment of a new Chief Executive and he would be supported in discharging these responsibilities by Deputy Chairman Michael Rake.


"The search for a new Chief Executive will commence immediately and will consider both internal and external candidates. The businesses will continue to be managed by the existing leadership teams," Barclays said.


Last week, Barclays had agreed to pay 290 million pounds worth penalties to the US and the UK authorities towards settling charges of attempting to manipulating Libor and Euribor rates, the global benchmark rates for lending.


The regulator had pointed out that Barclays' senior management and multiple traders were involved in the matter and that they also coordinated with traders at other banks to make false reports concerning both benchmark interest rates to benefit derivatives trading positions.


The information was used in determining the London interbank offered rate, Libor, and Euribor, which influence many other interest rates.


Libor is based on rate submissions from a relatively small and select panel of major banks, including Barclays, and is calculated and published daily for several different currencies by the British Banker's Association (BBA).


Generally, it reflects the cost of borrowing unsecured funds in the London interbank market.


Euribor, also calculated in a similar manner, measures the cost of borrowing in the Economic and Monetary Union of the European Union.


Yesterday, the bank said it would launch an audit of its business practices, led by Rake and a panel of non-executive Directors.


SBI hires six bankers for its $2 billion bond offering

A successful bond offering by SBI could be followed by at least two other banks, ICICI Bank and Indian Overseas Bank looking to raise funds through US dollar bonds


New Delhi: State-run lender State Bank of India (SBI) is planning to raise up to $2 billion in overseas borrowings through dollar-denominated bonds and has hired six investment banks, including Citigroup and UBS, for the issue, reports PTI.

Enthused by the recent steps to stem the falling rupee value and measures to encourage foreign debt inflows into the country, SBI plans to hit the market with its bond offering within couple of weeks, investment bankers working on the deal said.

SBI has hired six global giants -- Citigroup, UBS, Barclays Bank, Deutsche Bank, Bank of America Merrill Lynch and JP Morgan -- for the sale of dollar-denominated bonds, they added.

A suceesful bond offering by SBI could be followed by at least two other banks, ICICI Bank and Indian Overseas Bank, among other corporate entities, looking to raise funds through US dollar bonds, bankers noted.

The bankers are hopeful that SBI would be able to garner up to $2 billion through the bonds as the rupee is estimated to have hit its bottom against the dollar and any fall in the value of US currency from current levels would make it attractive to borrow at current exchange rates.

At the same time, there are some concerns that the negative rating actions by global agencies like S&P, Moody's and Fitch in the recent months on India's sovereign rating and that of the financial sector entities might negatively impact the bond offering of SBI. Even so, the bank should be able to raise about $1 billion, the bankers said.

The sharp plunge in the value of rupee, which recently hit a low near 57 against the US dollar, has already affected the bond sale plans of at least two Indian banks -- ICICI Bank and Indian Overseas Bank -- in past few months.

Both the banks had initiated their respective dollar bond plans and had hired investment bankers for the same, but the sale plans were delayed amid tough market conditions. While Indian Overseas Bank was aiming to raise about $500 million, ICICI Bank was eyeing a $1 billion bond sale.

Bankers said that a successful bond offering by SBI was likely to enthuse these banks to revive their dollar bond offerings.

Earlier this year, Reliance Industries Ltd (RIL) has raised $1 billion through dollar bonds -- making it the first corporate bond sale by an Indian company of 2012 and the first after a gap of nearly nine months.

Besides RIL, just one dollar-bond sale has hit the market so far this year in form of Axis Bank's $500 million offering.

However, Indian companies had raised more than $8 billion through dollar bonds during 2011, including $1.5 billion raised by RIL.


Deficient rains not worrisome for paddy says Pawar

Rainfall deficiency has affected sowing of coarse cereals, but situation in paddy is 'not worrisome' says the minister for agriculture


New Delhi: The deficient rainfall during last month has affected the sowing of coarse cereals but there is no cause for worry for the paddy crop, Agriculture Minister Sharad Pawar said on Tuesday, reports PTI.

The monsoon rains have been 31% below average up to 2nd July, Pawar told reporters.

He said the rainfall deficiency has affected sowing of coarse cereals, but situation in paddy is 'not worrisome'.

Till 29th June of the current Kharif season, rice was sown in 30.72 lakh hectare, coarse cereals in 10.42 lakh hectare, oilseeds in 10.77 lakh hectare and pulses 3.99 lakh hectare.

Monsoon rains, crucial for the country's agriculture as only 40% cultivable area is irrigated. Besides, higher agri incomes on account of good crop push up economic growth.

On the back of good monsoon last year, the country had produced record 252.56 million tonnes of foodgrain in 2011-12 crop year (July to June).


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