RBI cuts repo rate by 50 bps; CRR left unchanged

The Reserve Bank of India (RBI) on Tuesday lowered its main lending rate by half percentage point as it tries to boost economic growth amid some softening in inflation.

However, the reversal in the interest rate cycle is unlikely to be as rapid as anticipated earlier going forward, as concerns prevail over a whole host of macro-economic issues.

The repurchase rate (repo rate) has been reduced to 8.0% while the Cash Reserve Ratio (CRR) has been left untouched at 4.75%.

The reverse repo rate and the marginal standing facility (MSF) rate would stand reduced to 7.0% and 9.0%, respectively.

In order to provide greater liquidity cushion, the RBI has decided to raise the borrowing limit of scheduled commercial banks under the MSF from 1% to 2% of their net demand and time liabilities (NDTL).

The Bank Rate stands adjusted to 9.0% with immediate effect.

The RBI expects today's policy actions to stabilise growth around its current post-crisis trend while also containing risks of inflation and inflation expectations re-surging.

RBI Annual Policy...Dr. D Subbarao's media statement

RBI Annual Monetary Policy Statement for FY13

RBI expects India's FY13 GDP to grow by 7.3%

Assuming a normal monsoon, agricultural growth could stay close to the trend level while the industrial sector is expected to perform better than last fiscal as leading indicators of industry suggest a turnaround in IIP growth, the Reserve Bank of India (RBI) said while announcing its annual policy for FY13. The global outlook also looks slightly better than expected earlier, it said.

Overall, the outlook for domestic economic growth for FY13 looks a little better than in FY12. Accordingly, the baseline GDP growth for FY13 is projected at 7.3%. The advance estimate of the GDP growth of 6.9% for FY12 by the Central Statistics Office (CSO) is close to the Reserve Bank of India’s (RBI) baseline projection of 7%.

An important issue in this regard is the economy’s trend rate of growth, i.e., the rate that can be sustained over longer periods without engendering demand-side inflationary pressures, the RBI said.

Recent growth and inflation patterns suggest that the trend rate of growth has declined from its pre-crisis peak, the central bank noted.

Even though growth has fallen significantly in the past three quarters, projections suggest that the economy will revert close to its post-crisis trend growth in FY13, the RBI observed.

This does not leave much room for monetary policy easing without aggravating inflation risks, it said.

It must also be emphasised that the main reason for the apparent decline in the trend rate of growth relative to the pre-crisis period is the emergence of significant supply bottlenecks on a variety of fronts – infrastructure, energy, minerals and labour, the RBI said.

A strategy to increase the Indian economy’s potential by focusing on these constraints is an imperative, the central bank said.

RBI sees inflation at 6.5% by end of March'13

M3 growth seen at 15%, Deposits to grow 16%: RBI

Read More:

Risk Factors to RBI Annual Monetary Policy

Global economy showing signs of improvement: RBI

RBI Macroeconomic and Monetary Developments for FY12

Recovery in FY13 expected to be moderate: RBI

RBI move will boost investments: FM

RIL Board recommends Dividend

Source: Economist

Companies still prefer hiring from Metros: TeamLease

TeamLease Services Private Limited, India’s largest staffing company has released its latest Employment Outlook Report for the period Apr-Jun 2012 (Q1 FY 2012-13).

Sangeeta Lala, Sr. V-P, TeamLease Services, says, "While the previous two quarters had seen a fall in most of the sectors, the current outlook is quite positive. Retail and FMCG seem to be leading the growth, backed by strong intent to hire at junior (1-3 yrs.exp.) levels. Attrition rates, when computed between the previous quarter and the entire year (4 quarters), show a downward trend which may be a welcome news for most industries. Also, the validation of the last three quarters with the current reality (quarter in point) gives a higher value to the quarter except for Kolkata and Bangalore cities which seem to disappoint."

TeamLease releases the Employment Outlook Report every quarter after a survey conducted with HR managers and senior management of leading companies in India. The study, which covered 620 companies in the latest round, focuses on the employment growth potential, the business outlook and hiring forecasts with relation to the location and the company profile. The report serves as a reference manual to corporate houses to understand the employment trend in the present market scenario at major cities across the country. TeamLease has commissioned noted analytics solutions provider inTouch Analytics (www.be-in-touch.com) to conduct the study…More

India launches new generation strategic missile AGNI-V

Setting a new milestone in the country’s Integrated Missile Development Programme, India’s maiden Long Range Ballistic Missile (LRBM) AGNI-V (A-5) was successfully flight tested today.

The flawless auto-launch of the missile started at 08:04 hours. Piercing the thin cloud cover, the missile took off from the launch pad at Wheeler’s Island in Odisha at 08:07 hours and started rising exactly the way it was designed for. The missile, with a range of more than 5000 kms, followed the entire trajectory in copybook style perfection as the three stages of Propulsion dropped and fell at appropriate intervals into the Bay of Bengal.

The three propulsion stages, developed completely indigenously by DRDO, performed exactly the way they were intended to. The indigenously developed Composite Rocket Motors performed well, signifying the country’s stride and complete self-reliance in this complex propulsion technology…More

Demand of ACs will dip by 25% this season: ASSOCHAM

Due to new energy efficient norms and hike in excise duty, the Air Conditioner (AC) industry will witness a drop of 25% of sales this season as air-conditioner makers have already increased their prices by 20-25% to pass on the burden to end consumers, apex industry body ASSOCHAM said.

The prices are increased by most of manufacturers because of high energy efficiency labeling cost of 20-25%, according to a study titled ‘Demand of A.C Industry: An Analysis’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The paper further highlights that the input costs have increased by over 15 per cent in the last three months. This is creating a significant pressure on the profitability of the industry. Therefore, the additional burden on the consumer is anywhere from Rs. 3,000 to 7,000/- compared with last season.

Major companies are expecting a fall in sales this year, the leading consumer durable companies have already hiked prices of their products by almost 20 per cent since January. Other home appliance makers have also increased their prices by 20 per cent from this month onwards…More

CORPORATE RESULTS

RIL Q4 PAT at Rs 42.36bn

Reliance Industries Ltd has posted a net profit of Rs. 42360 mn for the quarter ended March 31, 2012 as compared to Rs. 53760 mn for the quarter ended March 31, 2011.

Total Income has increased from Rs. 735910 mn for the quarter ended March 31, 2011 to Rs. 874770 mn for the quarter ended March 31, 2012.

The Company has posted a net profit of Rs. 200400 mn for the year ended March 31, 2012 as compared to Rs. 202860 mn for the year ended March 31, 2011. Total Income has increased from Rs. 2512220 million for the year ended March 31, 2011 to Rs. 3360960 mn for the year ended March 31, 2012.

For the Consolidated period for the Year ended March 31, 2012, the Group has posted a net profit after taxes, minority interest and share of profit of associates of Rs. 197240 mn for the year ended March 31, 2012 as compared to Rs. 192940 million for the year ended March 31, 2011.

Cairn India

ACC

Ambuja Cement

HDFC Bank

HCL Tech

IndusInd Bank

Hindustan Zinc

Mindtree

Inflation could remain sticky around current levels

Generalised price pressures softened as growth deceleration eased demand, the Reserve Bank of India (RBI) said in its Macroeconomic and Monetary Developments for FY12. This is also evident in a significant decline in core inflation during Q4 FY12, the central bank said, adding that the pricing power of companies has waned with moderation in demand. "However, the path of inflation in FY13 could remain sticky around current levels due to high oil prices, large suppressed inflation, exchange rate pass-through, impact of freight and tax hikes, wage pressure and structural impediments to supply response," the RBI said in a statement. Primary food inflation reversed after a sharp decline as transitory effects waned, the RBI said. Energy prices are likely to remain a significant source of inflation ahead, as suppressed domestic prices of oil, coal and electricity prices are adjusted upwards, it added.

Growth may have bottomed out; Farm outlook bright: RBI

Global uncertainties and domestic cyclical and structural factors lowered India's economic growth to below 7% in FY12, the Reserve Bank of India (RBI) said in its Macroeconomic and Monetary Developments for FY12. "Early indicators such as pick up in credit, cement offtake, expansion mode in PMIs, uptick in the services composite indicator suggest that growth may have bottomed out," the central bank said in a statement. Prospects for agriculture are encouraging, the RBI said, adding that it's own assessment of leading indicators suggests that the 2012 monsoon may be normal. "However, a clearer picture will emerge after the forecast by the India Meteorological Department (IMD)," it added. Revival in the industrial sector hinges on the impetus to ease supply-side constraints, especially in the energy and mineral deficits, according to the central bank. Government initiatives to revive the power sector would be helpful in reviving the growth momentum, it said.

Liquidity deficit has eased due to Govt spending: RBI

The liquidity deficit has turned large since November 2011 due to both structural and frictional factors - mainly forex operations and a build up of Government’s cash balances, respectively, the Reserve Bank of India (RBI) said in its Macroeconomic and Monetary Developments for FY12.

Liquidity deficit eased in April 2012 due to large government spending, it added

The RBI injected durable primary liquidity of over Rs. 2 trillion through open market operations (OMOs) purchase and a 125 basis point (bps) reduction in Cash Reserve Ratio (CRR) to address the structural liquidity deficit. Reserve money growth decelerated in Q4 FY12, reflecting the CRR cuts. However, the pace of adjusted reserve money creation has recently picked up. Broad money growth fell below the indicative trajectory of the RBI for end-March 2012, reflecting a deceleration in deposit growth. Though inflation remains high, declining inflation and growth rates motivated the RBI to shift to a neutral monetary policy stance since December 2011, leaving policy rates unchanged.

RBI prunes banks' exposure to gold loan NBFCs

The Reserve Bank of India (RBI) has proposed that banks should reduce their regulatory exposure ceiling in a single NBFC, having gold loans to the extent of 50% or more of its total financial assets, from the existing 10% to 7.5% of bank’s capital funds. The rapid expansion of such NBFCs has led to their increased dependence on public funds, including bank finance. Exposure ceiling may go up by 5%, i.e., up to 12.5% of bank’s capital funds if the additional exposure is on account of funds on-lent by NBFCs to the infrastructure sector, the central bank said. Banks should have an internal sub-limit on their aggregate exposure to all such NBFCs, having gold loans to the extent of 50% or more of their total financial assets, taken together, the RBI said in a statement. Detailed guidelines in this regard will be issued separately, the RBI said today.

RBI panel to study NBFCs' lending against gold

NPAs...RBI asks banks to put in place robust mechanism

SBI comments on RBI monetary policy

State Bank of India welcomes RBI’s decision to cut the Repo Rate by 50 bps which has exceeded the market expectations. The move has been particularly commendable in the face of difficulties that still exist, i.e., suppressed inflation due to oil and coal prices and rising global oil and commodity prices, large government borrowing, sluggish industrial growth, financing of the widening current account deficit, and structural imbalances in protein food items with implications for food inflation.

The rate cut is expected to aid the softening of the interest rate environment, in due course. The actual reduction in rates on loans and advances will depend on the Bank's ability to realign deposit rates and enable it to pass on the benefits to borrowers. While the transmission of this phenomenon sets in with a lag, the job for banks has already been made easier by the recent cut in CRR, injecting permanent liquidity of Rs. 80,000 crore in the hands of banks, givingthem additional interest margin.

State Bank of India is committed to providing the best value to its customers. We propose to examine all components of our assets and liabilities and bring about suitable changes to usher in a softer interest rate regime. As and when liquidity eases across the banking system, affording scope for a downward revision of rates on deposits, a revision in the base rates of banks will ensue." (Pratip Chaudhuri, Chairman, State Bank of India)

RBI Interest rate cut neutral for Indian Sovereign rating: Fitch

The Reserve Bank of India's decision to cut its repurchase rate by 50 basis points to 8% Tuesday is neutral for India's 'BBB-' rating with Stable Outlook, Fitch Ratings says. We regard some monetary easing as an appropriate response to India's cyclical economic downturn, following a moderation in Indian inflation in the first part of 2012.

As we have previously noted, this moderation has given the RBI room to cut rates. Tuesday's cut was the first since the central bank embarked on a series of rate increases totalling 375bp from March 2010 to October last year. In contrast to monetary policy, fiscal policy headroom is restrained by the government's fiscal consolidation goals. Public finances remain a key rating weakness. Thus we would expect what stimulus the Indian economy needs to come from the monetary rather than fiscal side, and a rate cut is not a dramatic surprise. The space to cut rates further may be reduced if oil prices continue to rise. Given the commitment to cap subsidies at 2% of GDP announced in the March budget, this could result in higher retail petrol prices and higher inflation. More problematic would be a resulting increase in the current account deficit, which tightens domestic liquidity conditions and raises the cost of government borrowing.

India is likely to have an inflation problem for rest of 2012: Moody’s

FM reaffirms position on retrospective changes in tax laws

Union Finance Minister Pranab Mukherjee said that the relations between India and the United States have evolved in recent years into a global strategic partnership, based on shared values and increasing convergence of interests on regional and global issues. He said that relations between two countries has deepened and grown across a broad range of areas. Mukherjee was speaking during the bilateral meeting between India and US when he met the US Treasury Secretary Timothy Giethner in the latter’s office in Washington D.C. on Thursday. Mukherjee further said that India's political and strategic engagement is at an unprecedented level. The Finance Minister said that our cooperation in all areas, including defence, counter-terrorism, trade, investment, science and technology, education, and energy are growing. During the meeting, both the leaders discussed bilateral economic and financial cooperation as well as the recent developments in the global economy.

Tim Geithner urges Pranab for reassurance over tax rules

Fiscal consolidation to gain further momentum: FM

We have witnessed a great amount of economic and political turmoil over the past year. Volatility in commodity prices and disruptions to supply chains and high oil prices have added to global uncertainty and impacted businesses across the globe, slowing the recovery in both advanced and emerging economies. Even as the after effects of the global crisis continue to linger in many advanced economies, steeply rising sovereign debt in the absence of a quick return to trend growth is making markets nervous. Although actions by Euro zone countries and the ECB have stabilized the situation and calmed the market somewhat, the underlying structural problem remains and downside risks remain significant as manifest in recent movements in bond yields. While near term economic data has unexpectedly encouraging, economic conditions overall remain weak, and unemployment at politically unacceptable levels. We need to carefully deliberate our options going forward.

Dr. Kaushik Basu’s statement on reforms

Govt to kickstart stake sales in June, prefers auction route

After the dismal fiscal report card of the country in FY12, the government aims to kick-start its divestment process through stake sales in state-run companies in June, reports said. The government aims to raise Rs. 300bn in FY12 after it fell short of its Rs. 400bn target in the previous year by a whopping Rs. 260bn. it managed to raise a mere Rs. 140bn last year which saw fiscal deficit ballooning to 5.9%. The government blames the unfavorable market conditions for the missed targets. Even the $2.6bn auction of shares of Oil and Natural Gas Corporation in March failed to garner much response from institutional buyers. However, the government did manage to get Life Insurance Corporation of India to get a sizeable portion of the sale and argued that its target from the auction had been met.

The divestments in June too are expected to be conducted through the auction route, reports said. "When you push an FPO (follow-on public offering), the market prices come under pressure. Hopefully, we will go more for ONGC-type auctions," reports said quoting Mohd. Haleem Khan, head of the government's share sale programme in the Ministry of Finance. He added that FPOs that can be looked into include Oil India, BHEL, MMTC, SAIL, Neyveli Lignite, NALCO, Hindustan Aeronautics and Hindustan Copper. Also, as opposed to the ONGC auction, which was conducted on the NSE and BSE, the government would consider conducting auctions on only one exchange, Khan said. "Another thing which people have suggested is that the whole day auction is not required. I think two to three hours should be a good time," he added.

Rupee ends below 52/USD...Hits new 3-month low

The rupee fell below 52 level versus the US dollar on Friday, touching a new three-month low as global investors dump the local currency amid widening trade and current account deficits. The rupee ended at 52.0850 per dollar after being as low as 52.20 and as high as 51.9550. It had opened at 52.15 versus the previous close of 52.1450. Its intraday low of the session was its weakest level since Jan. 10. The rupee completed its biggest weekly decline in a month today. The Indian currency fell to the lowest level in more than three months after a government report on April 18 showed that the consumer price index (CPI) rose by 9.47% in March from a year earlier, after a 8.83% increase in the previous month. The rupee also weakened on speculation that local gold traders will boost dollar purchases to accelerate bullion imports and meet stronger demand for the metal before Akshaya Tritiya on April 24. The rupee is down ~1.5% this week, the biggest drop since the week ended March 23. Separately, India’s benchmark bonds fell the most in more than two weeks amid worries that the Government's large borrowing programme will dampen demand for the securities. Yields on the 10-year benchmark bonds touched a one-month low earlier this week after the RBI cut borrowing costs for the first time since 2009.

Inflation moderates to 6.89% in March

India's annual inflation decreased slightly in March from the previous month, data released by the Government showed on Monday. The headline WPI inflation for March stayed below the 7% mark after falling below it in January. Inflation, as measured by the wholesale price index (WPI), was at 6.89% in March as against 6.95% in February, the Union Commerce & Industry Minister said today. The March inflation print was slightly better than consensus expectations. The annual inflation rate was at 9.68% during the corresponding month of the previous year. Inflation for January was revised higher to 6.89% from the preliminary estimate of 6.55% while the revised WPI for that month now stands at 158.2 as compared to 157.7 earlier. The official WPI for ‘All Commodities’ for March rose by 0.9% to 159.8 from 158.4 in the preceding month. Build up inflation in the financial year so far was 6.89% compared to a build up of 9.68% in the corresponding period of the previous year.

Exports grow by 21% in FY12 at US$303.7bn

India’s exports for the fiscal year ended March 2012 (April 2011 to March 2012) registered a growth of 21% at US$303.7bn. Rahul Khullar, Commerce Secretary, informed that during the same period the imports were US$488.6bn with a growth of 32.1% and a Balance of Trade stood at US$(-)184.9bn. During April-March 2011-12, the following sectors have done well with regard to exports - Engineering, (US$58.2bn) which registered a growth of 16.9%; Petroleum & Oil Products grew by 38.5% (US$57.5bn); Gems & Jewellery registered a growth of 13.3% (US$45.9bn); Drugs and Pharmaceuticals increased by 21.9% (US$13.1bn); Leather by 22.5% (US$4.2bn); Electronics, 9.2% (US$9bn); Cotton Yarn and Fabrics grew by 17.4% (US$7.2bn) Readymade Garments, Yarns and Fabrics rose by 18% (US$13.7bn), Manmade Yarns and Fabrics grew by 18.5% (US$5.1bn); Marine Products increased by 31.4% (US$3.4bn).

Export target of US$450 bn by 2014 looks plausible: ASSOCHAM

India-ASEAN trade to reach US$70bn in FY13 : ASSOCHAM

Indian industry leaders and trade officials from ASEAN countries today called for concrete steps towards closer commercial and economic cooperation by increasing the two-way trade from 58 bn dollars to 70 bn dollars. The signing of ASEAN-India Trade in Goods Agreement in 2009 has paved way for eventual creation of one of the largest free trade areas with a combined population of 1.8 bn people and GDP of 2.8 trillion dollars, they said at an interactive session organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). Both sides now hope to conclude ASEAN-India Trade in Services and Investment Agreement. "With breaking down of trade barriers, India and ASEAN are moving towards a unified community," said Ms Chan Kah Mei, first secretary (economics) at the Singapore High Commission who is also chairperson of the ASEAN New Delhi Committee Working Group.

Govt approves 22 FDI proposals worth Rs 5.86bn

The Government on Friday approved 22 proposals of Foreign Direct Investment (FDI) totaling Rs. 5.86bn based on the recommendations of the Foreign Investment Promotion Board (FIPB) in its meeting held on March 30. Shantha Biotechnics' Rs. 5.14bn proposal to increase foreign equity was the biggest one among the 22 FDI proposals cleared today. The Finance Ministry also approved a Rs. 259.9mn plan by Mahindra and Mahindra Ltd. to set up a Joint Venture to develop, manufacture and provide service support for radar systems and various kinds of defence electronic systems. The Finance Ministry deferred 18 proposals, including that of CLSA Singapore Holdings Pte Ltd., Ankur Drugs and Pharma Ltd., Plethico Pharmaceuticals and Arch Pharmalabs.

Aviation companies allowed to raise money via ECBs

The rapid growth of the aviation sector in India has generated demand for additional finance for working capital and capacity expansion. High operating costs, particularly on account of high fuel costs, have put additional stress on the Airline Industry. In order to alleviate the immediate financing concerns of the Civil Aviation sector, Union Finance Minister, Pranab Mukherjee in his Budget Speech FY13, had announced that companies in the aviation sector would be allowed to avail of ECBs for a period of one year for working capital/refinancing of outstanding working capital rupee loan(s). The ECB made under this provision would have a maximum ceiling of US$1bn for the entire Civil Aviation sector. The limit for individual airline companies would be US$300mn. This limit can be availed either in a lump sum or in tranches depending upon the utilization of the limit during the one year when the facility is available.

Infrastructure development a must for India: Dr. CP Joshi

Dr. C.P. Joshi, the Union Minister for Road Transport and Highways today dedicated to the nation country’s first RFID Technology Based Electronic Toll collection Plaza at Chandimandir, Punchkula (Haryana) and four-laned Zirakpur-Parwanoo section of NH-5 in the states of Punjab, Haryana and Himachal Pradesh. Speaking on the occasion, Dr. Joshi said that this is the high time to make coordinated efforts by Central and State Governments to fulfill the dream of making India a developed nation. He said that a qualitative infrastructure development is a must for the growth of the country. Dr. Joshi said that Government of India has given thrust on infrastructure development in 11th and forthcoming 12th Five Year Plans with a view to increase national GDP. He said that central government is committed to facilitate the common man by providing new technology and better road transportation facility.

Referring about the new RFID Toll Plaza, he said that all the highways in the country will be provided RFID technique, which helps users to make payment without stopping at toll plazas and reduces traffic congestion and commuting time. Toll Statements can also be made available on line to the road users and they need not have to stop for receipt. He said that besides satisfying functional requirements, it is the cheapest mode for collection.

Gujarat CM inaugurates fastest executed Solar Project

SUN Group has commissioned one of the fastest executed solar projects in India at the Gujarat Solar Park, which was inaugurated by the Honourable Chief Minister, Mr. Narendra Modi in the Patan district. The 6MWp project was completed in a little over 3 months in association with Larsen & Toubro (L&T), who provided the EPC services for the project.

Gujarat Solar Park, with current capacity of about 215MWp, is an initiative of the Government of Gujarat to promote solar energy deployment in the state by streamlining the development process. The State Government allocated land to the project developers along with the required infrastructure for solar development such as power evacuation, roads, water, security, as well as single-window approvals. This accelerated the project development process for solar developers like the SUN Group.

SC panel orders CBI probe into Karnataka mine scam

In the latest corruption probe to rock the mining sector, the panel appointed by the Supreme Court has asked the Central Bureau of Investigation to probe into the role of JSW Steel and Adani Enterprises in mining and shipment of iron ore, reports said. The CBI will investigate the linkages between the donation of Rs. 100mn made by South West Mining, an associate firm of JSW group and alleged receipt of illegal mineral ore by JSW Steel and the alleged favours shown to it in respect of Mysore Minerals Limited, reports added.

The probe would also extend to politicians and companies involved in mine allotments. The panel has also recommended the cancellation of licenses of 6 companies for mining in Anantapur of Andhra Pradesh namely BIOP Group, Anantapur Mining Corp., Y.M. & Sons and 3 cos. of Obulapuram Mining.

SC partially lifts iron ore mining ban in Karnataka

The Supreme Court of India has allowed mining to resume in category A iron ore mines, or those of more than 50 hectares, in Karnataka post the approval of their environmental plans, reports said. The SC banned iron-ore mining in the state in July last year after it found large scale illegalities and violation of environmental norms. Later, state-run NMDC was allowed to mine up to one million tonnes per month from its captive mines in the state and was ordered for all sales to be conducted through online auctions.

Vodafone sends notice to Indian govt on tax proposal

After winning the Rs. 110bn tax dispute in India where the Income Tax department had to refund over Rs. 25bn to it, British telecom operator Vodafone has has served a notice of dispute against the Indian government, reports said. It will also consider commencing arbitration proceedings over new retrospective tax proposals made in the Union Budget, 2012 that aim to retrospectively tax offshore share transfers of foreign companies, the value of which is substantially derived from assets located in India, with effect from 1962. The deal in question here is Vodafone’s 2007 acquisition of Hutchison Whampoa’s India mobile assets for $10.7bn. According to Indian tax officials, the transaction was liable to be taxed in India.

ICICI Bank revises base rate and deposit rates

Systemic liquidity has improved significantly since the last week of March 2012. The liquidity deficit is expected to reduce further going forward. Due to the improved systemic liquidity situation, the bulk deposit rates have moderated from the levels prevailing in March. Reserve Bank of India (RBI) in its Monetary Policy Statement 2012-13 has reduced the repo rate by 0.50%. Further, RBI has enhanced the borrowing limit for banks under the Marginal Standing Facility to 2.0% of net demand & time liabilities (NDTL) in order to provide additional liquidity cushion to the banking system.

In view of the above developments, ICICI Bank has announced a reduction of 0.25% in the ICICI Bank Base Rate ("I-Base") with effect from April 23, 2012. The revised rate will be 9.75% p.a. as against 10.00% p.a. at present. Chanda Kochhar, Managing Director & CEO said "With the easing of systemic liquidity, we have already seen some correction in wholesale deposit rates. We expect the cost of funds to gradually come down and this reduction in the lending rates is a proactive move by us to pass on the benefit to our valued customers".

ICICI Bank also announced a decrease in interest rates for various tenors of retail fixed deposits by 0.25% with effect from April 23, 2012.

Syndicate Bank cuts base rate, BPLR by 25 bps

Syndicate Bank has announced that the Bank has decided to change in interest rates on lending and deposits i.e. Base Rate, Benchmark Prime Lending Rate (BPLR) and interest rates on term deposits as under:

• Decrease Base Rate by 25 bps, i.e., from 10.75% to 10.50% w.e.f. May 01, 2012.
• Decrease BPLR by 25 bps, i.e., from 15.00% to 14.75%, w.e.f. May 01, 2012.
• Revise downward Interest Rates on Domestic Term Deposits upto Rs. 15 lacs under select maturity buckets w.e.f. April 23, 2012.
• Revise downward Interest Rates on NRE Term Deposits w.e.f. April 23, 2012.

Tata Motors Group global sales up 26% YoY

The Tata Motors Group global wholesales, including Jaguar Land Rover, were 1,39,655 nos., in March 2012, higher by 26% over March 2011. Cumulative sales for the fiscal are 1,252,173, higher by 16% compared to the corresponding period in 2010-11. Global sales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range - were 63,791 nos., in March 2012, a growth of 12%. Cumulative sales for the fiscal are 599,927 nos., a growth of 17%. Global sales of all passenger vehicles were at 75,864 nos. in March 2012, higher by 41%. Cumulative sales for the fiscal are 652,246 nos., higher by 14%. Global sales of Tata passenger vehicles and the distribution offtake in India of Fiat cars were at 39,393 nos., for the month, higher by 32% over March 2011. Cumulative sales for the fiscal are at 337,813 nos., higher by 3% over March 2011.

Essel Group clarifies on IVRCL stake purchase

Few months back, the Essel Group was approached by investment banker(s) stating that IVRCL Ltd.’s ("IVRCL", "Company") promoters, who hold approx. 11.2% may be interested in selling their stake in the Company. However, the indicated asking price was manifold above the then prevailing market price. The Essel Group is in the infrastructure business through its company, Essel Infraprojects Ltd. ("EIL"). Recently, EIL had acquired majority stake in a Maharashtra based infrastructure company with a substantial order book and with this acquisition coupled with EIL’s projects, EIL has become a sizable player in the infrastructure business in India. By this acquisition, EIL had become a joint venture partner of IVCRL in some significant infrastructure projects.

Piramal Healthcare acquires molecular imaging development portfolio of Bayer Pharma

Piramal Healthcare Limited has announced that it has signed an agreement to acquire worldwide rights to the molecular imaging research and development portfolio of Bayer Pharma AG ("Bayer") through its newly created subsidiary – Piramal Imaging SA. The portfolio includes rights to florbetaben, which is in the final stages of its Phase III clinical trials. First Phase III results will be presented in New Orleans at the American Academy of Neurology Annual Meeting on April 25th, 2012. Florbetaben is a PET tracer for the detection of beta-Amyloid plaque deposition in the brain, which is the pathological hallmark of disease in probable Alzheimer’s disease patients. Detection of beta-Amyloid depositions is expected to result in earlier diagnosis and more specific treatment of Alzheimer’s disease.

Daiichi Sankyo, Ranbaxy Laboratories to launch Sevikar

Daiichi Sankyo Company, Limited ("Daiichi Sankyo") and Ranbaxy Laboratories Limited ("Ranbaxy") announced that "Terapia Ranbaxy", a subsidiary of Ranbaxy in Romania, will launch Sevikar, a fixed dose combination of olmesartan medoxomil and amlodipine besylate tablets, in Romania. Sevikar will be available in 3 strengths of 5/20mg (amlodipine besylate 5mg, olmesartan medoxomil 20mg), 5/40mg (amlodipine besylate 5mg, olmesartan medoxomil 40mg) and 10/40 mg (amlodipine besylate 10mg, olmesartan medoxomil 40mg).

US court rules in favour of Prandin Litigation: Sun Pharma

Sun Pharmaceutical Industries Ltd announced that the United States Supreme Court has ruled in favour of its subsidiary Caraco Pharmaceutical Laboratories, Ltd. in its’ patent litigation against Novo-Nordisk over Caraco’s generic version of Prandin, Repaglinide Tablets. The Supreme Court, in a unanimous opinion, concluded that Caraco can seek correction of Novo Nordisk’s inaccurate use code regarding the combination use of repaglinide and metformin for the treatment of type 2 diabetes. Sun Pharma is pleased that this landmark decision will help all generic companies prevent brand companies from improperly delaying or preventing the marketing of generic drugs against their products by misrepresenting their patents to the USFDA.

SpiceJet gets DGFT approval to import ATF directly

SpiceJet Limited, India’s most preferred budget airline, today announced that it has received approval from the Director General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, Government of India, for importing aviation turbine fuel (ATF) directly from overseas market.

SpiceJet Ltd is the first airline in the country to apply for approval for import of ATF and to get clearance for the same. The airline is presently negotiating with leading oil marketing companies and is hopeful to start importing fuel in due course. "The Airline sector will benefit from direct imports of fuel due to high ATF prices in India and we are hopeful to commence the import of fuel in due course. Importing fuel from overseas market at comparatively lower price would help us to considerably bring down our operational cost," SpiceJet Ltd Chief Executive Officer Mr. Neil Mills said.

Anil Agarwal's son buys 60% in Primex Healthcare

Agnivesh Agarwal, son of the Vedanta Group’s founder-chairman, Anil Agarwal, has acquired controlling stake in Chennai-based Primex Healthcare, according to reports. This will be the first investment by Agarwal Jr in his personal capacity, says report. Agarwal reportedly said India had a fragmented diagnostics services market, with many local players and a few regional/national ones. Agnivesh, a commerce graduate from Mumbai’s Sydenham College, has been on the board the group’s flagship businesses since 2005, says report.

Skoda introduces Ambition Superb

ŠKODA Auto India has introduced changes in the Superb model line. The all new Superb Ambition version will start at Rs. 17.6 lacs ex showroom Maharashtra and will allow greater accessibility to the Superb range. However, while making the model line more accessible, ŠKODA has retained Superb’s class-leading values in safety, comfort and efficiency. The Ambition variant will be powered by the award winning 1.8 TSI engine with a 6-speed manual transmission and 2.0 TDI CR with 6 speed Automatic DSG transmission. Both engines will aim to provide better fuel efficiency along with enhanced driving experience.

Tribhovandas Bhimji Zaveri IPO opens on April 24, 2012

Tribhovandas Bhimji Zaveri Limited (the "Company" or "TBZ Ltd. or "TBZ"), a jewellery retailer in India, is entering the capital markets on April 24, 2012, with an initial public offering of 16,666,667 equity shares of face value of Rs. 10 each (the "Issue")for cash at a price band fixed between Rs. 120 and Rs. 126 per equity share ("Equity Shares").

The Issue will constitute 25% of the post-Issue paid-up capital of the Company. The Minimum Bid Lot is 45 Equity Shares and in multiples of 45 Equity Shares therein. The Issue will close on April 26, 2012.

The Issue is being made through the 100% Book Building Process wherein not more than 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers ("QIBs"). The Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis out of which one-third shall be reserved for domestic Mutual Funds. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price.

China widens yuan’s trading band vs. US dollar

China widened the yuan’s trading band against the US dollar for the first time since 2007, signaling government’s confidence in the strength of the world's second biggest economy. Over the weekend, China announced a decision to widen the dollar-yuan trading range to 1% from 0.5%. The dollar's daily parity level was set at 6.2960 yuan versus 6.2879 yuan on Friday, in line with the greenback's broad gains against major global currencies. Starting April 16, the People's Bank of China will allow the dollar to move 1% from that level. The yuan weakened by the most in almost three months against the dollar. The yuan fell 0.24% to 6.3183 per dollar as of 9:49 a.m. in Shanghai, according to the China Foreign Exchange Trade System. It dropped as much as 0.35% earlier. In the offshore spot markets, where the yuan is traded more freely, the dollar rose to 6.310 yuan from 6.2986 yuan the previous day, according to reports.

China FDI down 6.1% yoy in March

Outlook slowly improving but remains fragile: IMF

Prospects for the global economy are slowly improving again, but growth is expected to be weak, especially in Europe, and unemployment in many advanced economies will stay high, according to the IMF’s latest forecast. Although action by policymakers in Europe and elsewhere has helped to reduce vulnerabilities, risks of a renewed upsurge of the crisis in Europe continue to loom large, along with geopolitical uncertainties affecting the oil market. Real GDP growth should pick up gradually during 2012-13 from a trough seen in the first quarter of 2012, with signs of improvement in the United States, and the emerging economies remaining supportive. The IMF raised its projection for the United States to 2.1 percent this year and 2.4 percent next year from 1.7 percent in 2011. It has also slightly improved its forecast for the euro area compared with January. But it still projects a mild contraction in the euro area, where concerns about high sovereign debt and fiscal consolidation have taken a toll, although Germany and France might see positive growth. Japan, bouncing back from last year’s destructive earthquake and tsunami, will see a recovery of 2 percent.

Dr. Jim Yong Kim named 12th World Bank President

Intergovernmental Group concerned about fragile global recovery

We the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development held our eighty-seventh meeting in Washington D.C. on April 19, 2012. Pranab Mukherjee, Minister of Finance of India was in the Chair, with. Alfonso Guerra, Director of International Affairs of the Bank of Mexico as First Vice-Chair and Mohamed Salem, Minister of Communications and Information Technology of Egypt as Second Vice-Chair.

South Korea scales back growth and inflation view

South Korea's central bank lowered its economic growth forecasts for this year, citing a slowdown in the global economy. South Korea's economy will expand 3.5% in 2012, compared with the 3.7% growth estimated in December, the Bank of Korea said. South Korea's GDP grew by 3.6% in 2011. Inflation will likely ease to 3.2% this year, comfortably staying within the BOK's target band of 2-4%, from 4.0% last year, the BOK said. The central bank had said in December that it expected CPI of 3.3% this year. The South Korean central bank attributed its revised inflation forecast to government steps such as the expansion of child-care benefits and free school meals. Core inflation, which excludes volatile energy and food costs, is now likely at 2.6% this year, the BOK said, down from its earlier forecast of 3.3%. "The easing of uncertainties related to the euro-zone sovereign debt problems act as a positive factor, but downside factors for growth predominate such as the downward revision of the world economic growth rate and higher oil import prices," the BOK said. On April 13, the BOK kept the benchmark interest rate steady at 3.25% for a 10th straight month, citing external uncertainties.

Asian Liquidity Stress Index erodes further in March: Moody's

Moody's Investors Service says that its Asian Liquidity Stress Index (LSI) deteriorated further in March and now stands at 15.5%, or 15 of the 97 issuers in the speculative-grade portfolio demonstrating weak liquidity, compared with 14.6%, or 14 out of 96 issuers, in February. "The deterioration in March was again largely the result of weakening liquidity profiles, particularly of Chinese corporates and more specifically of Chinese property developers. More than one in four of the high-yield Chinese property companies we rate is considered to have weak liquidity," says Laura Acres, a Moody's Vice President and Senior Credit Officer. "Overall liquidity in Asia remains strong relative to the high point of 37% in the fourth quarter of 2008, the peak of the global financial crisis. However, it is now at the highest level since October 2010 and there have been four months of consecutive, marked erosion," adds Acres.

Russia’s Sistema to write down $1bn on India mobile business

Post the cancellation of its licenses, Russia’s AFK Sistema, the holding company of Vladimir Evtushenkov has decided on a writedown of $1 bn on its Indian telecom venture, reports said. The writedown is a non-cash item that will be recognised in Sistema's fourth-quarter results, thus hurting earnings, reports added. Earlier this year, the Supreme Court had cancelled 122 licences issued in January 2008 issued by the then telecom minister, A Raja over irregularities in their allocation and allotment.

Audi acquires Ducati Motor

AUDI AG is acquiring from Investindustrial Group the tradition-steeped Italian sports motorcycle manufacturer Ducati Motor Holding S.p.A., which has its registered office in Bologna. The transaction will be completed as quickly as possible once authorized by the competition authorities. The Supervisory Boards of AUDI AG and Volkswagen AG approved the acquisition in Hamburg. Ducati is known worldwide as a leading brand in motorcycle manufacture, with outstanding expertise in engine development and lightweight construction. Alongside the traditional Italian brands Lamborghini and Italdesign, Ducati is now a third pillar for AUDI AG in Northern Italy. Another building block in the Company’s growth strategy thus falls into place. Rupert Stadler, Chairman of the Board of Management of AUDI AG, declared: "Ducati is known worldwide as a premium brand among motorcycle manufacturers and has a long tradition of building sporty motorcycles. It has great expertise in highperformance engines and lightweight construction, and is one of the world’s most profitable motorcycle manufacturers. That makes Ducati an excellent fit for Audi." The progressive control systems and special combustion chamber process of Ducati engines, their resulting sporty character, and Ducati’s extensive know-how in lightweight construction thus offer great potential for AUDI AG and the Volkswagen Group.

Tata Communications not intending to make an offer for CWW

Tata Communications Ltd has announce that it has been unable to reach agreement with CWW on an offer price and therefore confirms that it does not intend to make an offer for CWW.