Volume - 1 No. - 1 July 19, 2010
in For
Private Circulation only
Editor in Chief:
Dr. Kishore C. Padhy
Contributing Editor:
TANYA SHOME
PGDM-IVTH TERM
Published by the
Director
on behalf of
Institute of
Management &
Information Science
Swagat Vihar, Bankuala
Bhubaneswar-751002
Orissa, India
Tel.: +91-674-6542256/
57
E-mail: imis@imis.ac.in
visit us at : www.imis.ac.
 ‘RBI should make changes in base rate system'-The base rate
system, a new system for benchmarking lending rates, came into
effect from July 1. The new mechanism, which replaced the prime
lending rate system, sets the minimum lending rate for banks.
Most banks have set it at 7-8.5 per cent. Since base rate is a floor
rate, it was unclear how loans given at concessional rates to
industries that are being restructured or rehabilitated would be
treated. It is well-known that the banking industry has re-
structured a large number of viable units, where the funding of
over-dues has been considered at substantially low rates of
interest. The present base rate regime is totally silent, and would
hit this portfolio and borrowers perceptively. Currently, the base
rates are proposed to be reset every quarter, irrespective of time
and tenure of monetary policy instances of RBI. There needs to be
parity in timelines. There should be similar timelines in addition to
banks' own policy for resetting the base rate. This will ensure
monetary policy transmission without gap. The base rate
mechanism leaves out government borrowings, which plays a
crucial role in determining interest rates.
 SEBI cautions Central Bank of India on debenture lapses -SEBI
has 'warned' public sector Central Bank of India for violating
regulatory norms.
 India sees three brands launches a day, but only 5 per cent
survives.
 The authoritarian political system in China will last, because its
goals are the ones the Chinese polity has sought ever since the
opium wars.
 Fall in IIP to 11.5% makes RBI task difficult-slippage in industrial output below
expectation, complicates RBI call on key policy rates in July 27 review.
 Mutual suspicion to mutual trust-it is an opportune time for the mutual fund industry
and the regulator to sit together and work out changes in an atmosphere of trust.
 A year ago, the IMF forecasted that the world economy would grow 2.5 per cent
during 2010. The Fund had become positively optimistic, raising its global growth
forecast to 4.6 per cent.
 ESSAR POWER to invest Rs 9,000 cr in Orissa plant.
 Vishal Retail to soon become Shell Company. Texas pacific group, which has agreed
to infuse Rs 500 crore, has put in a condition that VRL will transfer all its fixed assets
to a special purpose vehicle (SPV) that will be predominantly owned by the foreign
private equity firm.
 RBI policy reviews to be more frequent-altered inflation dynamics, change in policy
interaction with financial markets prompt the move. Present rates:- Bank rate-6%,
Repo rate -5.5%, Reverse repo rate-4%, CRR-6%, SLR-25%, Base rate-7.5% to 8%,
Savings bank rate-3.5%, Deposit rate- 6.5% to 7%.
 No foreign fear on ICICI, HDFC: The government has assured private sector lenders
ICICI Bank and HDFC Bank that they will not be discriminated against vis-a-vis PSU
banks even as their status has been changed to foreign-owned Indian-controlled
lenders.
 FE best banks in India - FE Best Banker of the Year ICICI Bank, and Best Innovator
of the Year Axis Bank, Canara bank to raise funds to the tune of Rs 600 cr.
 Citi bags Euro money award for bank restructuring for profit.
 Six countries give I-T dept data on NRI black money.
 India's efforts at retrieving the black money its corrupt citizens have stashed abroad
are being helped by some countries.
 The debt trap - India’s external debt, as on end-March 2010, stood at $261.4 billion
(18.9% of the GDP).
 RBI may announce sunset clause to help banks migrate to base rate model-The
Reserve Bank of India is likely to announce a sunset clause with a deadline of June
30, 2011, for all loans in the erstwhile benchmark prime lending rate (BPLR) system
to help banks migrate to the new base rate model.
 US sees 90 bank failures in just 7 months.
 Calcutta HC ruling paves way for BoR-ICICI merger
 Govt sets up small savings fund panel -headed by RBI Deputy Governor Shyamala
Gopinath to review the structure of National Small Savings Fund (NSSF)
 Builders must disclose names of the lender banks: RBI