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Sunday, 6 May 2012

News Update Banking and Financial Services

MAY 07, 2012: DILUTED INSURANCE BILL COMING UP

The government appears to have buckled under political pressure, as the finance ministry is set to take a diluted version of the Insurance Bill to the Cabinet in the coming week.

The revised Insurance Laws (Amendment) Bill proposes to retain the foreign direct investment (FDI) cap in the sector at 26 per cent, against 49 per cent proposed earlier. This comes barely two weeks after the Cabinet cleared a toned-down version of the Banking Laws (Amendment) Bill.

MAY 05, 2012: ACCION INTERNATIONAL LAUNCHES $10 MILLION INVESTMENT VEHICLE, VENTURE LAB

In a further boost for social venture investing in India, microfinance and investment firm Accion International has launched its $10 million investment vehicle, Venture Lab, which is focused on providing seed capital to organizations that promote financial inclusion.

Venture Lab, which is currently in talks with 5 to10 start-ups, will invest between $100,000 and $500,000, mostly as convertible debt or equity, in early-stage enterprises, and expects to make about 20 such investments by 2015. The first investment is expected to be announced in the next two to three months. 

MAY 04, 2012: RBI HIKES RATES TO ATTRACT FOREIGN CURRENCY DEPOSITS


The Reserve Bank raised the interest rate ceiling on NRI deposits in foreign currencies by up to 3 per cent, to attract inflows in view of falling rupee.

Following RBI's announcements, the Indian banks will be able to offer higher interest rates on NRI deposits in foreign currency.

In another notification, RBI deregulated interest rates on export finance, a development that would help exporters to freely raise money in foreign currency without any limit on interest ceilings.
The RBI's decisions are aimed at arresting the declining value of rupee which closed at Rs 53.47 against a dollar.

 

MAY 3 2012: NOMURA CALLS FOR URGENT STEPS TO BOOST INVESTMENTS


Leading financial services company Nomura India has said unless investments claw back the lost momentum, there are more likelihoods of the economic growth further falling in the next few years and that a make-or-break of time for the government to take urgent measures to revive growth.

Noting that investment decline has contributed to as much as 45 per cent to the overall GDP decline in the recent past, which dipped from a high 8.4 per cent in FY11 to an estimated 6.9 per cent in FY12 and possibly even lower in the current fiscal, a Nomura report said the government badly needs to revive the investment climate to boost the overall growth by kicking off the much-needed second phase of reforms.

"Our analysis suggests that 45 per cent of the decline in potential growth is attributable to weaker investments, another 40 per cent to weaker total factor productivity and 15 per cent to weaker employment growth. Falling investments have led to lower productivity, in our view," Nomura India chief economist Sonal  Varma said in a research note. 

MAY 2, 2012: HSBC MUTUAL NOT LOOKING TO SELL STAKE OR EXIT INDIA

 Puneet  Chaddha  , chief executive officer of HSBC Mutual Fund, has quashed rumours that the fund house is looking to sell stake or exit its asset management business in India.

Mr Chaddha said HSBC is very serious about its India operations and has no plans to sell stake or partner with anybody to continue its business here.

"I can categorically say that am not involved in any such discussion (to sell stake or exit fund business in India)," Mr Chaddha said, adding, "We're certainly not looking to sell stake or partner with anyone."

On the contrary, Mr Chaddha said, HSBC is open to acquiring assets to grow its business in India.

"We're very open to growing inorganically... But we're very careful about valuations. We're very conscious of the value that we would have to pay for any such acquisitions. The deal has to make sense - both financially and strategically," Mr Chaddha said.

MAY 1, 2012: BANDHAN FINANCIAL SERVICES MAY RAISE RS 500 CRORE VIA SECURITISATION THIS FISCAL

Microfinance Company Bandhan Financial Services may tap securitization route to raise Rs 400-500 crore of debt in the current financial year, a top official said.

"We may securities Rs 400 to Rs 500 crore of loans in the current financial year to support our loan growth, which is likely to happen in the fourth quarter of FY13," chairman and managing director, Chandra Shekhar Ghosh, told PTI today.

Earlier, the micro-finance institution had securitized farm loans worth Rs 500 crore with IDBI Bank and Rs 25 crore each with Axis Bank and Development Credit Bank. 

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