Barclays expects RBI?s cash tightening steps to be rolled back only in the December quarter as it wants to avoid showing a lack of resolve about its measures by reversing them too soon. ?Having adopted these measures, the RBI will likely find it difficult to quickly reverse them, as that could be seen as a lack of resolve on the part of the central bank to support the currency and could be an additional risk for the rupee.? Barclays also downgraded India’s GDP growth forecast to 5.3% for 2013-14 fiscal year from 6%. The bank also pushed back the 75 bps rate cut expectations to December 2013-April 2014 from September-December 2013 following the central bank’s cash tightening steps.
Indian Bank revises interest rate
Public sector Indian Bank has revised its Foreign Currency Non-Resident (Banking) term deposit interest rates with immediate effect. For FCNR (B) deposits, in the dollar, the revised interestrate has been fixed at 2.67% for deposits of one year and above but less than two years, against the existing 2.69%. Interest rates have been revised at 2.48% for deposits of two years and above but less than 3 years from the existing 2.50%, Chennai-headquartered bank said in a release. For deposits of three years and above but less than four years, the interest rate remained unchanged at 3.78%. For deposits of four years and above but less than five years, the interest rates is revised to 4.17% from the existing 4.18%, it said.
Vijaya Bank pays dividend to govt
Public sector lender Vijaya Bank on Friday paid R170.17 crore to government of India (GoI), its promoter. The payment was handed over to finance minister P Chidambaram by bank?s chairman and managing director HS Upendra ?Kamath. The bank has also donated R1.40 crore to the Prime Minister’s National Relief Fund for the welfare of victims of the Uttarakhand floods.?The donation is the combined contribution of one day’s salary by all employees of the bank and also from the bank?s donation expenditure.
Deutsche Bank raises deposit rates by 1.5%
Close on the heels of RBI taking steps to squeeze out liquidity, German lender Deutsche Bank on Friday raised deposit rates by up to 1.50%, joining domestic banks like HDFC Bank, Yes Bank and Axis Bank. The lender increased the interest rate offering on the 100 days and 101 days to 180 days buckets to 8.50%, it said in a statement here. Revised rates are applicable from July 31, it said. The move follows domestic private banks, including Yes Bank, HDFC Bank and Axis Bank, which have upped rates by up to 4% because of the tight liquidity conditions. In order to contain rupee depreciation, RBI has taken slew of measures in the past couple of weeks resulting in the tight liquidity situation for the banks.
