India and Iran will meet in Mumbai to discuss a new payment mechanism for crude imports

Days after Reserve Bank of India stopped facilitating payments for Iranian crude imports, the central banks of India and Iran will meet in Mumbai tomorrow to discuss a new payment mechanism.RBI on December 23 said companies will be allowed to settle current account and trade transactions with Iran outside the Asian Clearing Union (ACU), a regional payment arrangement.This dismantled a mechanism used to complete payments for oil. Participants in the ACU settle transactions in either US dollar or euro.Iran has refused to sell oil under the new rules."Officials of RBI and Iranian central bank are meeting in Mumbai tomorrow (to discuss alternative payment mechanism),. "Alternate mechanism payments could be in any currency, Japanese yen or their local currency."


Iran is India's second largest crude oil supplier behind Saudi Arabia and accounts for over 12 per cent of its oil needs.In absence of a mutually acceptable payment mechanism, India may not be able to import 10 million barrels of crude oil contracted from Iran next month.India imported 21.3 million tons of crude oil from Iran in 2009-10 and this year imports are expected to be around 18 million tons as Reliance Industries has totally stopped using crude oil from the Persian Gulf nation.Mangalore Refinery and Petrochemicals Ltd (MRPL) is the biggest importer of Iranian crude oil with 7.1 million tons of contracted quantity.Mumbai-based Essar Oil imports roughly 3 million barrels per month (about 5 million tons a year), Indian Oil Corp (IOC) 3.5 million tons and Hindustan Petroleum Corp (HPCL) about 3 million tons.Till 2008, payments under the ACU mechanism was done in US dollars but after United States imposed sanctions against Iran over its suspected nuclear programme, the currency shifted to Euro.United Nations sanctions do not forbid buying Iranian oil and recently the European Central Bank (ECB) asked RBI to provide certificates that the Euro being used to import products are not on US sanctions list.

Barclays Bank launches branch in India

Pune has more than a hundred educational institutes.The pune is also emerging as a prominent location for IT and manufacturing companies to expand. Barclays will cater to the needs of leading players in these sectors and also service the needs of diverse range of retail customers, including professionals, salaried individuals and entrepreneurs, a press release issued here said.
Barclays Bank already now has nine branches across the country like Mumbai, New Delhi, Hyderabad, Junagadh near Rajkot, Kanchipuram near Chennai and Nelamangala near Bengaluru, Ahmednagar in Maharashtra and Rajahmundry in Andhra Prades and over 25 ATMs.Barclays Bank is committed to India and this branch is yet another milestone in our efforts to strengthen ties in the country.Barclays Corporate business has built a strong franchise in India over the past three-and-a-half-years with over 6,00,000 customers, the release said, adding India is one of the growing markets for Barclays PLC globally.In March 2008, Barclays Bank PLC launched Barclays Investments and Loans (India) Limited, a non-banking finance company, popularly known as Barclays Finance, to increase its footprint in the country by offering a range of products and services.

Banks need to lift deposit rates

The Reserve Bank of India (RBI) chief said on Friday that banks need to increase their deposit rates and reduce lending rates to accelerate the savings, investment rate and boost a double-digit growth. "This means banks need to raise the interest rates offered to depositors and reduce the lending rates charged on borrowers - in other words, reduce their intermediation costs, or in technical terminology, reduce the net interest margin (NIM)," Duvvuri Subbarao said in a speech on Friday.
There is a need to raise the level of national savings and channel those into investments to achieve double- digit inclusive growth, he added. Subbarao said that Indian banks' NIM was still higher than their peers in other emerging market economies even after accounting for mandated social sector obligation.
"Banks are short of funds and probably the direction that the RBI governor wants to give is to banks to lend more. Since banks don't have much resources, there is still scope for hike of 25-50 basis points in deposit rates, said Sandeep Shah, head of equity sales and research ar Tower Capital. Indian bank loans rose 22 percent on year as of Nov. 5. The growth is in line with the RBI's projection of 20 percent by March end but deposit growth at 15.3 percent as of early November lags the RBI's projection of 18 percent.

Banking Industry of india

The growth in the Indian Banking Industry has been more qualitative than quantitative and it is expected to remain the same in the coming years. Based on the projections made in the "India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank assets are expected to grow at an annual composite rate of 13.4 per cent during the rest of the decade as against the growth rate of 16.7 per cent that existed between 1994-95 and 2002-03. It is expected that there will be large additions to the capital base and reserves on the liability side.


The Indian Banking Industry can be categorized into non-scheduled banks and scheduled banks. Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000 branches of Scheduled banks spread across India. As far as the present scenario is concerned the Banking Industry in India is going through a transitional phase.

The Public Sector Banks(PSBs), which are the base of the Banking sector in India account for more than 78 per cent of the total banking industry assets. Unfortunately they are burdened with excessive Non Performing assets (NPAs), massive manpower and lack of modern technology. On the other hand the Private Sector Banks are making tremendous progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks are concerned they are likely to succeed in the Indian Banking Industry.

In the Indian Banking Industry some of the Private Sector Banks operating are IDBI Bank, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry.

BASIC IDEA OF INVESTMENT BANKING

Investment banking is a field of banking that aids companies in acquiring funds. In addition to the acquisition of new funds, investment banking also offers advice for a wide range of transactions a company might engage in.

Traditionally, banks either engaged in commercial banking or investment banking. In commercial banking, the institution collects deposits from clients and gives direct loans to businesses and individuals. In the United States, it was illegal for a bank to have both commercial and investment banking until 1999, when the Gramm-Leach-Bliley Act legalized it.

Through investment banking, an institution generates funds in two different ways. They may draw on public funds through the capital market by selling stock in their company, and they may also seek out venture capital or private equity in exchange for a stake in their company.

Banks will have to lend Rs 130k cr to meet target

Banks will have to lend around Rs 130,314 crore in March to meet RBI’s targeted credit growth of 16% for 2009-10. This means that credit in March has to be more than double the Rs 60,000 crore they lent in February 2010. The latest data released by RBI shows that in the second half of February , loans grew Rs 37,646 crore. Incrementally, loans have grown by 11.3% since April, leaving them only two fortnights to complete the year-end target of 16%.

While banks are still far from their target, there is a possibility that they may yet achieve it, considering that there is a last-month surge towards the end of the fiscal. For instance in March 2009, banks lent around Rs 100,000 crore. In March 2006, the end of a fiscal which saw highpaced credit growth, bank loans had grown by as much as Rs 140,000 crore.

Outstanding bank loans as on February 26 —the last working day of the month — stood at Rs 308,9322.9 crore. Both food and nonfood credit rose by Rs 3,364 crore and Rs 34,282 crore, respectively. At current levels, the annual YoY growth works out to 15.7% while loans have grown by around 11.3% since April. This means that banks have to lend around Rs 130,314 crore in March 10.

According to SBI chairman, OP Bhatt, the bank has not seen much pick-up in credit. However, the home loan book has been growing. Mr Bhatt was speaking on the sidelines of a conference in Mumbai. Bankers pointed out that though the banking sector may be able to cut it fine to reach the target, most public sector banks are expected to reach the target as data until December suggests that public sector banks have been seeing a steady growth in loans while private banks have witnessed a slowdown.

Bank Holidays for 2010 in India

Bank Holidays for 2010 in India January 2010
1st January	Thursday	New year Day
14th January	Thursday	Makar Sankranti (Kite Festival Holiday), Pongal
26th January	Tuesday	Republic Day
February 2010
12th February	Friday	Mahashivratri
27th February	Saturday	ID-E-Milad
March 2010
1st March	Monday	Holi (Festival Of Colours)
24th March	Wednesday	Shri Ram Navami
28th March	Sunday	Mahavir Jayanti
April 2010
2nd April	Friday	Good Friday Holiday
May 2010
27th May	Thursday	Buddha Purnima
July 2010
13th July	Tuesday	Rath Yatra
August 2010
15th August	Sunday	Independence Day
24th August	Tuesday	Rakhi (Raksha Bandhan)
September 2010
2nd September	Thursday	Janmashtami
10th September	Friday	Id ul Fitr (End of Ramadan)
11th September	Saturday	Ganesh Chaturthi
October2010
2nd October	Saturday	Mahatma Gandhi’s Birthday (Gandhi Jayanti)
17th October	Sunday	Dusshehra, Deepavali Festival, Diwali (Also called Festival of Lights)
November 2010
5th November	Friday	Diwali Festival Holiday
7th November	Sunday	Hindu Calendar New Year
17th November	Wednesday	Id-ul Zuha/Bakrid (Also known as Bakri EID)
21st November	Sunday	Guru Nanak Jayanti
December 2010
17th December	Friday	Moharram (Islamic New Year)
25th December	Saturday	Christmas Day