NDPMS Wealth Management

(Reuters) - The Reserve Bank of India on Wednesday relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee. The RBI, however, said the relaxation is only applicable while the swap window remains open until November 30. After that, banks' overseas borrowings above 50 percent of their Tier I capital will have to be of minimum maturity of three years, it said. The RBI set up the swap window for banks earlier this month saying they can borrow overseas up to 100 percent of their Tier 1 capital level, although any loan over 50 percent of that level must be for at least three years. Under the plan, the central bank will offer to exchange foreign currency for rupees at a rate below market rates for banks who raise these funds through overseas borrowings. (Reporting by Neha Dasgupta; Editing by Susan Fenton)

PSU Banks to get more capital from GoI, to enable concessional lending to select sectors Government of India (GoI) has decided to enhance the amount of capital to be infused into PSU Banks sufficiently higher from the budgeted sum of `14,000cr.  The additional capital provided to banks is primarily to enable them to lend to borrowers in selected sectors such as two wheelers, consumer durables etc, at lower rates in order to stimulate demand. The extent of benefit of this move to the demand growth in aforesaid sectors would likely depend upon the quantum of interest rate concession provided. We still await more clarity regarding the operational nature of the scheme. Source: Angel Broking

During 1QFY2014, the Current Account Deficit (CAD) came in at USD21.8bn (4.9% of GDP) as compared to USD18.2bn (3.6% of GDP) in 4QFY2013 and USD17.1bn (4% of GDP) in the corresponding quarter of the previous year. This is lower than market expectations of a deficit amounting to USD23bn owing to higher-than-anticipated invisibles. Excluding the USD7.3bn increase in gold imports during the quarter as compared to 1QFY2013, the CAD would translate to 3.2% of GDP.   The trade deficit worsened to 11.3% of GDP (USD50.5bn) in 1QFY2014 as compared to 9.0% of GDP (USD45.6bn) in the previous quarter and 10.2% of GDP (USD43.8bn) in 1QFY2013. This can be attributed to a 1.5% yoy decline in merchandise exports along with import growth of 4.7% yoy. Invisibles reported 7.2% yoy growth with net inflow of USD28.7bn, higher than USD27.5bn in the previous quarter and USD26.8bn in 1QFY2013. Amongst its components, net services exports came in at USD16.9bn aided by a decline in service imports e...