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Yes Bank ups PLR to 16.5 per cent

Mumbai, July 03: Private sector lender Yes Bank on Thursday said that it has increased Prime Lending Rate (PLR) by 0.50 per cent to 16.5 per cent, with effect from July 1.

Along with the PLR hike, Yes Bank has also increased its fixed deposit interest rates for tenors ranging from 9 months 1 day to 3 years, a statement said here.

Deposits for a tenor of 1 year and 1 day up to 18 months would earn 9.75 per cent per annum now as against 9.50 per cent earlier. Senior citizens would get 10.25 per cent as against the earlier 10 per cent per annum.

Yes Bank joins a host of other public sector and private sector banks, which have increased their PLRs over the last week.

Following the reserve bank hiking both repo and Cash Reserve Ratio (CRR) by 0.50 per cent in late June, banks were left with no choice, but to hike lending rates as their margins came under pressure.

"The bank has been observing keen interest among customers to invest in deposit products and we believe this trend will sustain given the safety, security, liquidity and flexibility provided under the bank's deposit programmes," Yes Bank's managing director and CEO Rana Kapoor said.

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Decision on support to Govt after more discussion on N-deal: UNPA


New Delhi, July 03: Refusing to clear the air on UNPA’s stand over the Indo-US nuclear deal, senior Samajwadi Party leader Amar Singh said on Thursday that the alliance partners are united and the decision on supporting UPA government over the deal will come only after discussing the issue with experts.

In a joint press conference, senior leaders of UNPA including Mulayam Singh Yadav, Amar Singh, Chandrababu Naidu and Om Prakash Chautala put to rest all speculation about a divide in the alliance. The address was also an attempt to keep Left in good humour despite varying political compulsions.

Talking to media, UNPA chairman and SP chief Mulayam Singh said, “UNPA will work together on all the issues. We had some doubts about the deal, but PM Manmohan Singh has clarified them. We will have more discussions…”

“We discussed the nuke deal with National Security Advisor MK Narayanan. This is an issue of national debate. We will discuss the matter with experts and scientists and then decide our stand and there is no time limit for that,” UNPA spokesperson and SP general secretary Amar Singh said.

Answering a question about UNPA sinking its differences with UPA, Amar Singh clarified, “We have differences with the UPA government over price rise, inflation and other issues. We have not demanded the sacking of Oil minister Murli Deora and Finance Minister Chidambaram, but people should take responsibility of the situation. Our stand has not changed.”

He also reiterated that communalism is a bigger threat than Indo-US nuclear deal.

INLD chief Om Prakash Chautala said, “We will not reveal our stand on the deal before July 6”, clearly keeping his cards close to his heart. The PM will return to the country on July 6 after attending the G8 meet. Chautala also said that this is a matter of national debate and government should clarify all doubts before they could think of a change in stance.

However, all is not right with the UNPA as the other partners have started to sense that the SP will go with the Congress considering its political compulsions in UP. But, that may not be as easy for groups like the TDP and the AGP, as the political dynamics in their respective states warrants that they take the Congress as their principal adversary.

TDP chief Chandrababu Naidu, who earlier had a meeting with Left leaders Prakash Karat and A B Bardhan, said that the UNPA was united and that they will decide whether to support the govt after a national debate is held on the issue.

With this announcement, the UNPA has increased the waiting for UPA, which has been banking on its support in case the Left pulls out over the deal.

Inflation surges to 11.63% for week ended June 21

New Delhi, July 04: The inflation figure for week ended June 21 rose by 0.21% from the past week to 11.63%. It was 11.42% during the previous week. Finance Minister P Chidambaram has speculated that it would further rise to 13% in the near future.

The rise has been mainly on account of increase in prices of fruits, vegetables, imported edible oils, tea, sea fish, cement and iron and steel and spices, though the index for fuel items declined during the week.

The wholesale price index-based inflation has continued to rise despite efforts being taken by the government and RBI to tame prices through fiscal and monetary measures.

In a move to help check inflation, under pressure from the government, the steel industry had yesterday agreed to cut prices of select products by up to 10 per cent and also discourage exports.

Planning Commission Deputy Chairman Montek Singh Ahluwalia had on Wednesday said, "Controlling inflation is an important short term challenge." However, he had added, "if properly handled, it (inflation) should not affect the average growth objective of 9 per cent.

The RBI had last week increased the short-term lending rate (repo) and the mandatory deposit that banks (cash reserve ratio) by 50 basis points each to control inflation. This move was a bid to suck out liquidity from the system. And consequently the banks had been compelled to increase their lending rates.

A quarterly poll on Wednesday had depicted that India's economic growth was expected to slow more than previously expected in 2008/09, pulled down by high inflation, the Reserve Bank of India’s policy tightening and record oil prices.

The hike in prices has been attributed primarily to the surging oil prices which have hit various global economies. It has also been reported that oil prices would hit a high of USD 175 by Diwali. This is sure to further add to burgeoning inflationary trends and become a crucial factor in the election strategy of political parties considering the forthcoming General Elections.

India's June rains 20pc above normal
4 Jul 2008 11:26 am

Singapore - India's monsoon rains were 20 per cent above normal from June 1 to July 2, a senior official with the India Meteorological Department (IMD) told Dow Jones Newswires Friday.

The official, who didn't wish to be named, said rains have been "less" in the interior parts of South India over the past few weeks, and may continue to be so until the middle of July.

He said monsoon rains have been well spread in north, west and central India and the outlook for these areas remains "good" for the next 3-4 days.

India's monsoon rains are a critical source of water for summer-sown crops, such as rice, oilseeds, pulses, cotton and sugarcane, being sown at present. Around 60 per cent of the country's farmlands are rain-fed.

Reliance ADAG seeks probe into RCom share slide

New Delhi, July 04: The Anil Ambani Group on Friday asked market regulator SEBI to probe hammering down of shares of Reliance Communications and other companies by rivals and charged RIL with attempting to derail ongoing talks for a deal with South African telecom giant MTN.

The Anil Ambani Group today wrote a letter to SEBI seeking a probe into the dip in shares of RCom, which had touched a 52-week low of Rs 381.05 yesterday, ADAG sources said.

Comments from RIL, which had shot off a fresh letter to RCom and MTN yesterday invoking the arbitration clause under the non-compete agreement with ADAG, could not be immediately obtained.

Sources said that ADAG has charged RIL with desperate attempts to derail discussions with MTN and also accused rival interests of market abuse to impact valuations.

"RIL has invoked the provisions of dispute resolution contained in the non-competition agreement dated January 12, 2006, and has invited RCom to participate in the process of mutual conciliation prior to commencement of formal arbitration," an RIL statement had said.

The second communication by RIL, after its first letter asserting the right of first refusal on any stake sale, could cast a shadow on negotiations between MTN and RCom, both of whom are seeking to extend the exclusivity agreement for talks for the deal.

ADAG has also said that RIL was undermining Anil's efforts to create a global telecom giant worth USD 70 billion with strong Indian roots by merging RCom and MTN.

MTN's tolerance may be running out for a possible USD 70 billion deal with Anil Ambani-led Reliance Communication, with local media speculating that the South African telecom major's CEO may walk out if the dispute between the Ambani brothers is not settled soon.

While noting that elder Ambani sibling Mukesh-led Reliance Industries' claim to first right of refusal to sale of a stake in RCom is threatening to sink a deal between RCom and MTN, a recent report said that "the validity of the claim may never be tested, as there's a high chance MTN's tolerance threshold will expire first."

Clarify N-deal picture by July 7: Left’s ultimatum to Govt

New Delhi, July 04: The Left parties have demanded that the Government make it clear to them whether it is approaching the IAEA for a safeguards agreement by July 7. The Left has announced it will also launch a countrywide agitation exposing the 'failures of UPA government' on rising prices and will explain its stand on N-deal to the people.

Addressing a press conference after all Left parties meet here, CPM general secretary said he was going to send a letter to External Affairs Minister Pranab Mukherjee with the Left’s queries.

“We have asked the Govt when is it going to the IAEA to finalise the safeguards agreement. They should tell this to us by July 7. The general secretaries of all four Left parties have signed the letter.”

He also said the Left will launch an agitation over the govt’s failures on all fronts from July 14. He also said they will not allow communal parties to surge their head in India.

It was a divided Left Front that convened a meeting of their coordination committee to work out the modalities of a pull out over the Indo-US civil nuclear deal. There is a difference of opinion in the Left parties as to the timing of a pull-back.

CPI General Secretary AB Bardhan on Thursday had said he would urge the Left parties in their meeting on Friday that modalities for withdrawal of support from government should be worked out as the Government was ignoring its allies and was infact being deceptive over the nuclear deal.

However he appeared not wanting to embarrass the PM at a time when he was going for as important a meeting as the G8. RSP and Forward Bloc are of the view that since the UPA appeared to have found new allies in Samajwadi Party, there was no pint in supporting it any longer. CPM General Secretary Prakash Karat has also said if the Prime Minister Manmohan Singh were to go to the G8 - which is now a sure thing - it will be considered as a movement on the nuclear deal. He infact wanted to avert the G8 visit by pulling the rug and pushing the government into a minority.

Bardhan said at a press conference in Delhi that since the Left parties’ stand on nuclear deal is firm, they must work out the modalities of pulling out from the deal.

“The Govt kept ignoring us on several issues. The deal is now final. It was agreed that the IAEA agreement would be first shown to us. That didn’t happen,” he said. Bardhan accused government of deceptive campaign grossly exaggerating 'benefits' of the deal.

He added that they will pull out their support the moment government goes to the IAEA. "The moment we come to know the government has gone to IAEA board of directors, we will withdraw support," he said.

Advani is a bigger threat than Bush: Amar Singh

New Delhi, July 05: Amid all-round criticism for ‘ditching’ the UNPA and the Left and siding with the ‘once foe’ Congress over the issue of Indo-US nuclear deal, Samajwadi Party leader Amar Singh on Saturday sought to justify his party’s actions, saying it was important to keep communal forces out of power.

Addressing reporters in New Delhi, Amar Singh reiterated that the nuclear deal was in the nation’s interest, adding that former President APJ Abdul Kalam had put his stamp of approval on it during talks with UNPA leaders. Amar Singh said that during the talks, Kalam stated India doesn’t need any more nuclear tests, what it needs is uranium.

Commenting on the claims of the nuke deal being anti-Muslim, the SP leader said, "I don’t know if it is a Hindu deal or a Muslim deal." Kalam had also rubbished claims of the deal having any communal angle, he added.

He reiterated that communalism is a bigger threat for India than George W Bush, whose term as the US President was set to expire in few months. With BJP and BSP coming close ahead of the Lok Sabha polls, Amar Singh said BJP leader L K Advani was becoming a bigger threat than Bush.

While acknowledging that political parties often switch sides, Amar Singh made it clear that his Samajwadi Party has never sided with communal forces.

When asked why the SP didn’t consult Kalam a year back if the nuclear deal was in India’s interest, Amar Singh regretted the delay and promised to act timely in the future. He however added that the delay was caused because the government didn’t consult them on the deal earlier.

"The first official contact between my party and the government was made when National Security Advisor M K Narayanan briefed the SP leadership on the deal few days back," Amar Singh said. "So far the Left had been briefing us on the deal and since Left parties were part of the government, we considered Left and Congress (and their views) equal," he added.

Asked about which side they would be on if a vote is held in Parliament, Amar Singh said the SP would vote in favour of secular forces. "Left, BJP, BSP and other parties can vote together to bring down the UPA government, but we won’t join communal BJP in this endeavour," he stated.

While ruling out any formal alliance with the Congress as of now, Amar Singh did say that his party would go to any extent to keep the communal forces out of power.

He also rubbished claims that the SP was negotiating for ministerial berths in UPA government in return for the support on the nuclear deal, saying the claims that he had asked for Finance Minister P Chidambaram and Petroleum Minister Murli Deora’s head were baseless.

"Both Chidambaram and Deora have been my friends. I am not against them. What I am against is inflation, price rise, the Petroleum Minister’s defending of windfall profits of private refineries," Amar Singh said. I am no one to suggest to the Prime Minister or to Soniaji, who to keep as minister," he added.

Commenting on Advani’s claim that the UPA government has lost majority, Amar Singh said time would tell who is in majority and who is in minority. "Jo jeeta wohi sikandar," he said.

UNPA’s Fate?

Asked by reporters whether the UNPA was still intact or dead, Amar Singh said the principles on which the alliance was forged were still intact. He refused to comment on UNPA partners’ claims that the SP was no more part of the alliance.

UNPA constituent INLD’s chief Om Prakash Chautala had earlier said that the Samajwadi Party had walked out of UNPA, on its own. The INLD will vote against the UPA government if no-confidence motion is moved in Parliament, Chautala added.

"Congress has insulted them (SP) earlier...Now for the third consecutive time, they wanted to be insulted. It is their own thinking," the INLD chief said.

The INLD is the "strongest opposer" of the nuclear deal and was worried "about the fact of becoming a slave of America", he added.

The Asom Gana Parishad (AGP) meanwhile said all UNPA constituents will take a collective decision whether to retain the Mulayam Singh Yadav-led party in the alliance or not.

ICICI bank hikes interest rates on foreign currency deposits

Mumbai, July 04: Private sector lender ICICI bank on Friday hiked its interest rates on foreign currency non-resident external (banks) deposits and non resident external term deposits with effect from July 1.

With this, FCNR (B) deposits in US dollar, having a maturity of one to two years, will now attract an interest rate of 2.56 per cent against 2.41 per cent a month ago, the bank said in a press release issued here today.

For deposits in Euro, having the same maturity, the revised rate is 4.64 per cent against 4.34 per cent in the previous month while for pound the new rate stands at 5.7 per cent, the bank said.

For NRE deposits having a maturity 12-18 months, the rate has been revised to 3.31 per cent as compared to 3.16 last month, it said.

escape from high inflation, says Reddy
Mumbai July 5, 2008, 0:45 IST

Reserve Bank of India Governor Y V Reddy has said the higher level of headline inflation may be difficult to avoid in the short term though central banks across the globe are according a top priority to "calm the nerves".


"Further, high inflation rates, when accompanied by higher variability of inflation, raise greater uncertainties. These acute policy dilemmas at the current juncture between growth and inflation have to be faced in the background of financial turbulence, which is yet to calm down," the governor said at a meeting of the task force on financial markets regulation organised by the Initiative for Policy Dialogue in Manchester on July 1. RBI made the address public only today.

The global problem of rising inflation was attributed to volatile food and fuel prices.

Reddy said concern over economic slowdown in the US has mounted in view of the possible spillover to the global economy. "Threats to the global economy are emanating from advanced economies in sharp contrast to earlier crises, which stemmed from the emerging world," he said.

While maintaining that India had managed to remain largely unaffected by the global financial turmoil, he pointed out that a nascent domestic credit derivatives market, restrictions on investment in such instruments and regulatory guidelines on securitisation had helped the economy.

In the global context, the central bank chief also pointed to the risk arising from larger investment by companies in financial markets and said there had been excessive "financialisation" of corporate entities.

"Increasingly, many of the positions of the corporate entities in financial markets may not be related to their underlying business," he said.

Listing out the various instruments used by RBI in managing the Indian situation, Reddy said central banks might have to look beyond financial sector reforms and address broader related issues that impinge on the balance between the sovereign, the regulators, financial institutions and markets.

Amway India targets Rs 3,000 cr turnover by 2013

Baddi, July 06: Direct selling FMCG firm Amway India is eyeing close to four-fold topline growth in the next five years to Rs 3,000 crore by expanding reach, widening product basket and strengthening marketing activity.

Amway India, a wholly-owned subsidiary of the US-based Alticor, had recorded Rs 800 crore turnover in 2007 and expects it to go up to Rs 1,000 crore this year, company's managing director and chief executive officer William Pinckney said.

In its first year of operation in 1998, the company's turnover was only Rs 91 crore.

Pinckney said Amway India plans to increase the number of branch offices to 300 in the next three years across the country from 120 now.

Amway India sells over 100 products in five categories of personal care, home care, nutrition and wellness and cosmetics.

Pinckney said that the company would bring in more products in the existing categories.

Nutrition and wellness contributes to around 50 percent of the company's turnover, cosmetics 20 percent and the rest from personal and home care divisions with equal contributions.

"I don't think that there will be significant change in contribution from these divisions as we clock a turnover of Rs 3,000 crore by 2013," Pinckney said.

Nutrition and wellness will be the main focus of the company, he added.

Indian cos losing more on US bourses; value slips below $100 bn

Mumbai/New York, July 06: Going to Big Apple no more seems to be a value-adding proposition for Indian companies as those listed both on the American and Indian bourses have seen an additional erosion of about 7 billion dollars in their US market capitalisations in the ongoing downslide.

Eleven Indian companies, which are listed both in the local stock market and on the NYSE or Nasdaq in the US, have seen their collective market capitalisation in India plunge by over Rs 1,55,000 crore (about 48.7 billion dollars) since January 10, after which the downslide began on Dalal Street.

In comparison, these firms have seen their Wall Street valuations, based on market cap figures in the US bourses, dipping by a higher 55.7 billion dollar in the same period.

These companies include four IT companies Infosys, Wipro, Satyam and Patni computer, two largest private sector lenders ICICI Bank and HDFC Bank, Tata Group's Tata Motors and Tata communications, billionaire Anil Agarwal-led Vedanta Group's Sterlite Industries, public sector telecom major MTNL and pharma major Dr Reddy's labs.

The Indian stock market benchmark Sensex had scaled its life-time high of 21,206.77 points on January 10, but has lost close to 8,000 points since then in a bearish market.

While the US market has also been broadly on a downslide in this period, the rate of fall has been relatively less than the Indian bourses.

Still, the securities of Indian companies trading in the US market has mostly seen a bigger fall than not only in the US broader market but also the fall in their own valuations in the Indian market.

The US market valuation of these 11 companies stand at about 95.6 billion dollars, down from 151.3 billion dollars on January 10.

In comparison, the Indian market valuation of these companies stand at about Rs 3,95,000 crore (about 91.5 billion dollars), down from about Rs 5,50,000 crore (140 billion dollars) as on January 10.

A sharp depreciation in the Indian currency versus the dollar has also contributed to a bigger fall in their local market valuations in the US currency terms.

For example, Infosys has seen its Indian market valuation in rupee terms actually rising by about Rs 9,000 crore, but its dollar-MCap has fallen marginally in this period.

For Satyam, both the rupee and dollar market cap in India has gone up in this period.

The rupee was trading at 39.26 to a dollar on January 10, but has now depreciated to about 43.14.

While all the companies have seen their US market values dipping in this period, Satyam is the only that has seen the dollar value of its Indian market value rising in this period.

Among the individual companies, ICICI Bank, HDFC Bank, Infosys, Tata Communications and TATA Motors have seen a larger erosion in their us market capitalisations as compared to that for the Indian market.

However, companies like Wipro, Sterlite, Patni, MTNL and Dr Reddy's have seen almost similar fall in both the US and Indian market capitalisations.

The loss has been highest at over 25 billion dollars for ICICI Bank in the US, while in India it is over 22 billion dollars. Besides, HDFC Bank and Sterlite have also seen about nine billion dollars and seven billion dollars loss in their US market values.

Infosys, Satyam, Patni computer and Dr Reddy's have, however, seen a loss of less than one-billion dollar, which range between 100-400 million dollars.