Reliance MF Announces Change in Medium Term Fund

Reliance Mutual Fund has decided to make changes in the asset allocation/investment pattern of Reliance Medium Term Fund effective from September 19, 2009.

Accordingly the scheme will invest 0% to 80% of asset in money market instruments / short term debt instruments / floating rate notes with maturity / interest rate reset period not exceeding 3 months, with a risk profile of low risk.

Moreover, it would invest 20% to 100% of asset in money market instruments and any other instrument with duration of more than 3 months but not exceeding 3 years. Securitized debt would include investment up-to 80% of the corpus. It would have a risk profile of low to medium.

However, any unit holder who does not wish to comply with the changes can redeem their units at the applicable NAV without any exit load for a period from August 20-September 18, 2009

ICICI Bank looks to focus on home, car loans

ICICI Bank plans to focus more on increasing its home and car loan portfolios in the coming months and stated that its rates are competitive in the industry. However, the impact of drought in some parts of the country is yet to be evaluated which might have an impact on the banking industry as well if consumer demand is affected. Additionally, the regulators have to be in line with the innovations in the market and also be ahead of the curve to face the challenges in the system while the organizations have to take into account future risks while shaping the risk management tools than simply assessing past risks.

Canara Bank to mop up Rs 600 cr via bonds

With an issue of non-convertible subordinated perpetual bonds - tier I (series II), Canara Bank is looking at mobilizing Rs 600 crore, including a greenshoe option of Rs 200 crore which would be used to build up the bank''s capital adequacy and also improve its long-term resources. In addition, the bonds will have a call option that may be exercised after the instrument has run for at least 10 years and with approval from the RBI. Moreover, the bonds coupon rate would be 9.10% per annum for the first 10 years, followed by a step-up option to boost the coupon rate to 9.6%, if the call option has not been exercised by the bank at the end of the tenth year from the deemed date of allotment.


FM assures fresh capital for RRBs

Finance Minister Pranab Mukherjee stated that in order to increase credit flow to the farm sector, the government will introduce fresh capital into the regional rural banking (RRB) system to make it profitable by 2010 and this in turn would help RRBs achieve their agriculture targets in 2009-10. Additionally, he said that it will set up a committee to look into the demands of the rural banks, including fresh capital infusion. However, he said that there will be no fresh proposal for farm loan waver and that the economy will grow at over 6% in the current fiscal.

Banks report growth in business

In the reporting fortnight ended July 31, scheduled commercial banks reported a growth in business whereas the deposits with SCBs increased by a robust Rs 60,741 crore. However, credit growth, which slackened in the first quarter, has gathered pace with banks collectively disbursing Rs 30,604 crore whereas investment by SCBs rose by Rs 14,280 crore.

HSBC to focus on corporate loans

HSBC is considering focusing on its corporate loan book in order to grow its business. However, it expects a flat growth in its consumer loan book, which had shrunk by 8 per cent last year. The bank will lend more in the unsecured loans segment, amid improvement in the economic scenario and Credit Information Bureau (India) starting its retail database, said Ms Naina Lal Kidwai, the Group General Manager and Country Head, HSBC India.

The bank has also received licences from the RBI for three bank branches. It will set up branches in Guwahati, Surat and Nashik. The group is also open to increasing its stake in the life insurance joint venture, Canara HSBC Life Insurance.

IndusInd Bank mops up Rs 480 cr via QIP

By means of the qualified institutional placement (QIP) route, IndusInd Bank has mobilized Rs 480 crore to enhance its capital base. However, the first QIP issue of the private sector bank was placed at Rs 87.50 per share or at a 0.4% discount to the market price and the amount raised represents 13.39% of the bank''s post-offer equity capital. In addition, the qualified institutional buyers (QIBs) with whom the issue was privately placed include financial institutions, mutual funds and foreign institutional investors.

Additionally, with the expansion of the equity base via the QIP, the Hinduja Group''s holding in the bank has come down to 22.63%. However, it is said that the QIP will increase IndusInd Bank''s total share capital to Rs 410 crore and the bank''s net worth has crossed the Rs 2,000-crore marks and its capital adequacy ratio is over 15%.

Banks want control on free third-party ATM use

Banks want control on free third-party ATM use as they petitioned the Reserve Bank of India (RBI) to put restrain on cash withdrawals at third-party ATMs.

Representatives from the Indian Banks Association met central bank officials late last month, said RBI had accepted most of their suggestions and these are likely to come into effect soon.

Customers have been allowed to withdraw cash and check account balances since April 1, without having to bear any interchange fee. The burden was earlier passed on to bank clients.

Now, banks want modifications in the free ATM rule after spurt in number of transactions but a fall in the ticket value of each transaction. Banks are mainly focused on psoposal to impose a limit of Rs 10,000 per withdrawal when customers use a third-party ATM and a limit of five per month on the number of free third-party transactions.

Cadila Healthcare - CRISIL Rating

Cadila Healthcare Ltd has informed regarding the letter dated July 23, 2009 issued by CRISIL Rating for the Rs 1250 million Short Term Debt Programme (including Commercial Paper Programme) of the Company enhanced from Rs 600 million.