RBI tightens norms for utilisation of foreign currency FDs

FCNR (B) funds can be only used for the rupee working capital or capital expenditure needs of exporters or corporates who have a natural hedge or a risk management policy for managing the exchange risk, the RBI said in a notification

Mumbai: In bid to check outflow of forex, the Reserve Bank of India (RBI) on Wednesday tightened norms for utilisation of the foreign currency fixed deposit funds, reports PTI.

The funds could be used by banks for lending to only those entities with risk management policy for managing the exchange rate volatility.

“Accordingly, it has been decided that the FCNR(B) funds representing deposit liabilities may be utilised for making loans to resident constituents for meeting their foreign exchange requirements,” RBI said in a notification.

It can be only used for the rupee working capital or capital expenditure needs of exporters or corporates who have a natural hedge or a risk management policy for managing the exchange risk, it said.

It is subject to the prudential and interest-rate norms, credit discipline and credit monitoring guidelines in force, it said.

The notification assumes significance as rupee touched an all-time low against dollar.

The rupee closed at all-time low of 53.84 losing a hefty 72 paise against dollar due to sustained demand for the US currency which rose sharply against major rivals after poll results in Greece and France fuelled fresh Eurozone worries.

Last week, the RBI had raised the interest rate ceiling on NRI deposits in foreign currencies by up to 3% to attract inflows.

“Interest rate ceiling on Foreign Currency Non-Resident FCNR (B) deposits of banks has been raised from 125 basis points (bps) above the corresponding LIBOR or Swap rates to 200 bps for maturity period of one year to less than three years, and to 300 bps for maturity period of three to five years,” RBI had said.

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News channels want TRAI to issue directions on placement fee

Following protests by News Broadcasters Association, TRAI chairman JS Sarma had in interviews to TV channels said while he expected “carriage fee” to remain within reasonable levels, there was no provision for placement fee

New Delhi: In order to address the concerns of several leading television news channels over the latest cable rules, broadcasters expect the Telecom Regulatory Authority of India (TRAI) would in the coming days issue further guidelines concerning the issue of “placement fee”, reports PTI.

After TRAI had issued the guidelines for the cable industry last month, the News Broadcasters Association (NBA) had protested against the decision to allow “carriage fee”.

Carriage fee is the money that Multi System Operators (MSOs) and cable operators charge from TV channels to carry their content on their networks to the viewers.

Following protests by NBA, TRAI chairman JS Sarma had in interviews to TV channels said while he expected “carriage fee” to remain within reasonable levels, there was no provision for placement fee.

Mr Sarma had also said channels will be listed as per the Electronic Place Guide (EPG) and as per genre and there would be no provision of placement fee.

Sources said NBA now expected that TRAI would issue certain directions which would clearly spell out these, banning of placement fee and use of EPG for listing channels.

A delegation consisting of leading broadcasters also met information and broadcasting minister Ambika Soni on Wednesday in this regard, sources said.

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BSE to exclude Patni from BSE Mid-cap index

BSE has decided to exclude Patni Computer Systems from BSE 200, BSE 500 and BSE Mid-cap indices with effect from 14th May. The exchange will include Shree Cements and Solar Industries in BSE 200 and BSE 500 index from the same date

Mumbai: The country’s premier stock exchange BSE on Wednesday said it has decided to exclude the Patni Computer Systems scrip from BSE 200, BSE 500 and BSE Mid-cap indices with effect from 14th May, reports PTI.

The exchange will include Shree Cements and Solar Industries in BSE 200 and BSE 500 index from 14th May, BSE said in a statement here.

BSE has also decided to add Tribhovandas Bhimji Zaveri in BSE IPO index with effect from 11th May, the release added.

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