RBI issued two separate circulars addressed to primary urban co-operative banks and state and central co-operative banks allowing them to fix interest rates on various non-resident deposit schemes, a move intended attract more funds from NRIs and arrest the slide in rupee in the forex market
Mumbai: The Reserve Bank of India (RBI) on Wednesday allowed co-operative and primary urban co-operative banks to fix their interest rates on various non-resident deposit schemes, reports PTI.
Extending the ambit of its recent decision to deregulate deposit rates, RBI said, “Banks are free to determine their interest rates on both savings deposits and term deposits of maturity of one year and above under Non-Resident (External) Rupee deposit accounts and savings deposits under Ordinary Non-Resident accounts with immediate effect.”
RBI issued two separate circulars addressed to primary urban co-operative banks and state and central co-operative banks.
The apex bank, earlier this month, freed interest rates on various non-resident deposit schemes by scheduled commercial banks, a move intended attract more funds from NRIs and arrest the slide in rupee in the forex market.
It had also put restrictions on forward contract in rupee to check speculations in the forex market.
RBI had already freed the saving and deposit rates for resident bank customers.
The deregulation in rates on NRE and NRO deposits is intended to make such funds more attractive at a time when the rupee has depreciated sharply during last few months.
RBI in its last monetary review said it is closely watching the rupee situation and will respond to it as appropriate.
The rupee has depreciated by over 15% in 2011 so far against the US dollar.
SEBI on Wednesday barred seven companies, their directors, merchant bankers and other related entities from participating in the securities market till further order for not complying with the disclosure norms in their IPO prospectus
Mumbai: Cracking whip against seven firms for not complying with the disclosure norms in their initial public offer (IPO) prospectus, the Securities and Exchange Board of India (SEBI) on Wednesday barred the companies, their directors, merchant bankers and other related entities from participating in the securities market till further order, reports PTI.
The merchant bankers who have been prohibited from participating securities market include “PNB Investment Services, the book running lead manager of IPO of Taksheel Solutions and Almondz Global Securities (PG Electroplast and Bhartiya Global Infomedia)”. Their CEOs too have been barred from participating in the capital market till further order.
“...by not complying with the regulatory obligation of making the disclosures, the company and its directors had not provided the vital information which is detrimental to the interest of investors in securities market,” SEBI order against Taksheel Solutions said.
It said that proceeds of IPO invested by the company in the Indiabulls Mutual Fund-Liquid Fund (amounting to Rs5 crore) be deposited in an escrow account, till further directions.
“Taksheel Solutions is prohibited from raising any further capital, in any manner whatsoever, till further directions,” it added.
Similar orders were passed against the other six firms.
The market regulator has asked them to deposit the proceeds from the IPOs in escrow bank accounts and also call back the IPO proceeds to their cash credit accounts.
Talking about the importance of lead book running mangers in an IPO, SEBI said if the merchant banker fails to act diligently and comply strictly with the letter and spirit of the regulations, the investors are put to grave danger, which may not be in the interest of the capital market.
“This is precisely what has happened in this (Taksheel) particular issue where lack of adequate and independent due diligence by the merchant banker has resulted into shenanigans on the part of the company and its promoters/directors,” the SEBI order said.
In its order against Tijaria Polypipes, SEBI said “the fraudulent, abusive, manipulative and illegal activities committed by the company Tijaria Polypipes and certain entities/persons to the detriment of the genuine investors and adversely affecting the integrity of securities market...SEBI as a regulator should immediately intervene...to stop further harm to investors...”
The other companies against which orders were passed, include, Bhartiya Global Infomedia, RDB Rasayans, Brooks Laboratories and PG Electroplast. Similar order too has been passed against Onelife Capital Advisors.
In its first quarterly monetary policy review for FY11-12 in July, RBI had said that credit growth was likely to slow down as a result of the rate hikes. It projected the growth to be around 17%-18% this fiscal, as against the earlier estimation of 19% while deposit growth had been pegged at 17%
Mumbai: Non-food credit has grown 17.2% to Rs44 lakh crore during the 12 months to 16th December, according to the Reserve Bank of India (RBI), reports PTI.
The offtake had stood at Rs37.53 lakh crore during the 12 months to 17 December 2010.
This is the third consecutive fortnight when the annualised credit growth has stayed below 18%.
Experts said the slowdown in credit growth is on account of the high interest rate regime, which has been in place for over a year to rein in inflation.
The RBI has raised key lending rates by 350 basis points through 13 hikes since March 2010 to curb inflation, which has been above the 9% mark since December last year.
The rate of price rise was 9.11% in November.
Deposits rose to over Rs58.32 lakh crore as on 16th December, as against Rs49.50 lakh crore as of 17 December 2010. This is a growth of 17.8%.
In its first quarterly monetary policy review for FY11-12 in July, RBI had said that credit growth was likely to slow down as a result of the rate hikes.
It projected the growth to be around 17%-18% this fiscal, as against the earlier estimation of 19% while deposit growth had been pegged at 17%.
During FY 2010-11, bank credit offtake increased by 21.5%, while deposits grew by only 15.5%.
Indian industry has complained that the high interest rate regime has resulted in slowing down of investments and the industrial growth.
Economic growth slowed to a nine-quarter low of 6.9% in the July-September period. Besides, industrial growth entered the negative trajectory in October and contracted by 5.1%.