Stock Watch

A plan to raise 2.9 billion rupees has been called off by Dhanlaxmi Bank. It was meant to sell 19.6% of its stake to a group of investors after one of them has backed out. The US based Customers Bancorp Inc. was planning to purchase a 4.9% stake in the bank through share issues. Later, they had to withdraw from the deal because of “certain regulatory reasons”.

State Bank of India (SBI), also known as India’s largest lender has lot of self commitments to abide by. They are working endlessly to raise the $5 billion debt by December through foreign debt named as medium term notes (MTN). SBI Chairman, Pratip Chaudhary, in Delhi told that they had planned to raise $ 5 billion through off offshore loans by December.

MTN acts as a bond which has a maturity period ranging between 5-10 years and is continuously offered by different brokers as compared to other bonds which are issued at once.

As per information provided by two bank officials of Standard Chartered Bank, regional chief executive officer, India and South Asia Neeraj Swaroop of Standard Chartered Bank will soon acquire a position of regional chief executive, South-East Asia, and will soon be transferred to Singapore.

The same information is confirmed by an official of Reserve Bank of India (RBI) stating that Jaspal Singh Bindra, group executive director and chief executive officer (CEO) of Asia, expresses at a latest meeting with the central bank that Neeraj Swaroop will acquire a new assignment outside India.

The Reserve Bank, in its efforts to check price rise has raised short term borrowing and lending rates by 25 basis points. This is now for the 10th time since March 2010 and this move might also result in making auto and home loans more expensive.

Short term lending has been raised by 7.5 per cent while the rate of borrowing has been hiked by 6.5 per cent. The marginal standing facility known in short as the MSF has increased by 8.5%, thus going up by 25 basis points.

State Bank of India which is the country's largest lender has planned to hire many numbers of officers for managing its associate banks. It has planned to hire over 5,000 officers.

Out of the total number, 4,987 officers will be recruited for associate banks of SBI and remaining 206 officers would be hired for SBI itself.

Reserve Bank has been facing various frauds in the financial sector over the past six months and has announced today measures to tighten internal controls in banks.

RBI has brought a change in overseas direct investment rules for Indian companies, the bank had announced on Friday that companies which provide guarantees for projects on behalf of their overseas subsidiaries or joint ventures will be relaxed by cutting their financial commitment by 50%. Apart from this RBI also permits these companies more freedom to restructure the balance sheets of these entities.

ICICI bank said in a statement that it has raised $1 billion (about Rs 4,500 crore) through an issue of medium term bonds in overseas markets. These bonds are 5-1/2 years long and carry a coupon of 4.75%.

The release mentioned that bonds are issued at a price of 99.665% by the ICICI bank’s Dubai branch. It is also revealed in the release that issue has received oversubscription of $2.70 billion or approximately Rs12,100 crore, with

State Bank of India (SBI) had planned to offer its rights issue in 2011-12 but it looks like government is finding it difficult to fish out the required fund, therefore SBI suspended its rights issue to next financial year.

Cash starved government is unable to arrange Rs 11,000-12,000 crore to keep its shareholdings in the bank unchanged at 59%.

In the country like India to hike the savings bank rate is not an easy task. Recently the Reserve Bank of India (RBI) has launched a debate regarding this topic. It has presented a discussion paper before its Annual Monetary Policy for 2011-12.

The RBI has also increased the savings bank rate from 3.5 per cent fixed in 2003 to 4 per cent at the time of announcing the policy.