IBA likely to submit comments on pre-payment charges by Sept-end: RBI

After receiving comments from the IBA, the RBI will go through it and take a final call on the pre-payment charges on loans taken under floating rates by customers, RBI chief general manager and banking ombudsman (New Delhi) M Rajeshwar Rao informed media persons

New Delhi: The Reserve Bank of India (RBI) today said the Indian Banks' Association (IBA) is expected to submit comments by the end of this month on the proposal to do away with pre-payment charges on home loans, reports PTI.

"IBA is expected to submit comments on pre-payment by the end of this month," RBI chief general manager and banking ombudsman (New Delhi) M Rajeshwar Rao said here.

After receiving the comments, the RBI will go through it and take a final call on the pre-payment charges on loans taken under floating rates by customers, he said.

Earlier this month, the banking ombudsmen conference suggested banks should not impose pre-payment charges on loans with floating rate of interest.

It had said banks may also offer long-term fixed rate housing loans to customers.

The conference said lenders may address their asset liability mismatch (ALM) issues by taking recourse to the Interest Rate Swaps (IRS) market.

"Floating rate loans pass on the interest rate risk from banks, which are much better placed to manage it, to borrowers and, thus, banks only substitute interest rate risk with potential credit risk," the ombudsmen had noted.

The banks will, however, be free to recover or charge appropriate pre-payment penalties in the case of fixed rate loans, it had suggested.

Meanwhile, Mr Rao pointed out that the maximum complaints received from customers were card related.

He said as much as 41% of total complaints by customers are against the public sector banks in the New Delhi region which includes Jammu & Kashmir besides Haryana.

In the region, he said the ombudsman received maximum complaints against State Bank of India followed by ICICI Bank and HDFC Bank.

The total complaints received during 2010-11 stood at 10,508 which is 13% less than in the previous fiscal (12,613).

Most complaints are received from Delhi followed by Haryana.

The Banking Ombudsman Scheme of the RBI deals with any deficiency in the services by the bank and as many as 27 services are part of the scheme.


HDFC Bank appoints Ajay Marwaha as head of trading, treasury

Ajay Marwaha joins HDFC Bank from Daiwa, India, where he was managing director and head-fixed income currencies & commodities

Marwaha executive vice president and head, trading, in the treasury department. Mr Marwaha will be in charge of interbank foreign exchange and bullion desk, interest rate trading, inter-bank derivatives, institutional sales and overseas business (treasury). He will report to Ashish Parthasarthy, treasurer, HDFC Bank.

Mr Marwaha is an MBA from Jamnalal Bajaj Institute of Management Studies and holds a bachelor of engineering degree from Mumbai University. He brings to the table a rich 17-year experience of big-ticket treasury trading.

He joins HDFC Bank from Daiwa, India, where he was managing director and head-fixed income currencies & commodities (FICC). At Daiwa, Mr Marwaha was mandated to set up and manage the FICC platform in India and INR-linked FICC activities out of Singapore. He has also worked with global organisations like Standard Chartered Bank, JP Morgan Chase, Citigroup, Lehman Brothers and Nomura Securities.


Share prices up on expected lines: Tuesday Closing Report

Nifty may move sideways with an upward bias to the level of 5,015

Gains in the global markets after news that European leaders were readying plans to enhance the size of the regional bailout fund helped the domestic benchmarks snap their four-day losing spree and close nearly 3% higher.

As we had mentioned in our Monday report, that in case the Nifty holds itself above yesterday's low of 4,759, we may see gains up to the level of 5,000. Today the index witnessed a gradual upmove to the level of 4,971. We may now see a sideways move with an upward bias to the level of 5,015.

The market opened firm this morning on support from its Asian peers which were trading higher on hopes that euro-zone policymakers will expand efforts to control Greece's debt issues in a bid to prevent a banking crisis. The Nifty opened 70 points higher at 4,905 and the Sensex started the day at 16,289, up 238 points. The opening figure was the day's low for the Nifty while the intraday low for the Sensex was seen in initial trade wherein the index touched 16,283. Thereafter the indices begin their northward journey supported by broad-based buying by institutional investors.

Reports on Monday indicated that European policymakers were chalking out plans to enhance the size of the regional bailout fund, reduce Greece's debts and recapitalise banks.

The domestic market continued to climb as the day progressed, buoyed by the positivism in the global markets. It scaled its intraday high in the last hour on support from the key European markets which were trading with gains of over 2% in early trade. At the day's high, the Nifty rose to 4,983 and the Sensex touched 16,552.

However, a minor bout of profit-taking was noticed after the benchmarks touched the highs of the day, which resulted in the indices closing a tad above those levels. At the end of trade, the Nifty closed at 4,971, up 136 points and the Sensex jumped 473 points to 16,524. The traded volume on the NSE was 51.90 crore shares.

The advance-decline ratio on the National Stock Exchange (NSE) was a positive 1272:460.

Among the broader indices, the BSE Mid-cap index rose 1.60% and the BSE Small-cap index gained 1.36%.

All sectoral gauges closed higher with the leaders being BSE Realty (up 4.66%), BSE IT (up 3.56%), BSE Oil & Gas (up 3.47%), BSE TECk (up 3.02%) and BSE Consumer Durables (up 2.82%).

The top gainers on the Sensex were DLF (up 8.46%), Jaiprakash Associates (up 5.93%), Tata Motors (up 5.92%), Reliance Industries (up 5.09%) and Hindalco Industries (up 4.26%). Cipla (down 0.28%) was the lone losers on the index.

The top performers on the Nifty were led by DLF (up 7.82%), Tata Motors (up 6.64%), JP Associates (up 5.9%), RIL (up 5.20%) and Tata Power (up 4.75%). Cipla (down 0.47%) and BPCL (down 0.11%) ended at the bottom of the benchmark.

Markets in Asia ended on a firm note on the optimism emanating from Europe. Gains were also boosted by rising copper prices. A European Central Bank executive board member said at a conference in New York on Monday that euro-zone policymakers were "exploring ways" to enhance the capabilities of the European Financial Stability Facility, to dispel fears of a contagion within the bloc.

The Shanghai Composite gained 0.91%; the Hang Seng surged 4.15%; the Jakarta Composite jumped 4.76%; the KLSE Composite climbed 2.43%; the Nikkei 225 advanced 2.82%; the Straits Times rose 2.70%; the Seoul Composite vaulted 5.02% and the Taiwan Weighted settled 3.09% higher.

Back home, foreign institutional investors were net sellers of stocks worth Rs1,083.83 crore on Monday. On the other hand, domestic institutional investors were net buyers of equities worth Rs575.21 crore.

GMR Infrastructure said it has won the country's first mega road project for widening the 555km long Kishangarh-Udaipur-Ahemadabad highway, estimated to entail an investment of Rs5,387 crore. The Bangalore-based group won the first highway project in Western India through international competitive bidding at Rs636 crore annual premium for 26 years. The stock fell 0.37% to Rs26.80 on the NSE.

Areva T&D India's transmission business, now part of Alstom Grid, has received a Rs40 crore contract from Reliance Power. The order envisages design and construction of a 220 kV substation for the proposed 350 MW Doorsar Solar Power Plant in Rajasthan. The Doorsar plant is India's largest solar power project. Areva T&D gained 2.25% to close at Rs225 on the NSE.

Drug major Glenmark Pharmaceuticals today said its US subsidiary, Glenmark Generics, has received tentative approval from the US health regulator for its generic Zolmitriptan tablets used for treating migraine. IMS Health has reported sales for the 12 month period ending June 2011 as $41 million for Zolmitriptan tablets. Glenmark Pharma added 1.06% to close at Rs324 on the NSE.


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