RBI announced auction of two 48-days Government of India Cash Management Bills

The Reserve Bank of India on 23 August 2013 announced the auction of two 48-days Government of India Cash Management Bills. As per the notification issued by the Reserve Bank of India, the auctions will be conducted using Multiple Price Auction method.

The Reserve Bank has also cleared that the competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber). Result of the auctions will be announced on the same day.

The Cash Management Bills will have the generic character of Treasury Bills and their sale will be subject to the terms and conditions specified in the General Notification No. F.2 (12)-W&M/97 dated 31 March 1998 issued by Government of India and as amended from time to time.

Details of the Cash Management Bills (CMBs) are given below:

	Auction Date	Settlement/Issue Date	Date of Maturity	Notified Amount
1	26 August 2013	27August 2013	14 October 2013	11000 crore
2	27 August 2013	28 August 2013	15 October 2013	11000 crore
			Total	22000 crore

Cash Management Bills (CMBs)

The Government of India, in consultation with the RBI, took a decision of issuing Cash Management Bills (as a short-term instrument). The CMBs allow the Central Bank to meet the temporary cash flow mismatches of the Government of India. CMBs in India is a non-standard, discounted instruments that is issued for maturities less of less than 91 days and are regarded as the generic character of Treasury Bills.

CMB is a flexible instrument for a Central Bank as it is issued at times of requirement. It allows the Central Bank to have lower cash balances and issue fewer long-term notes. CMBs tend to pay higher yields than bills with fixed maturities, but their shorter maturities lead to lower overall interest expense.

ONIKA JAISWAL

PGDM IST YEAR, 2013-15 BATCH

Rupee weakens again, breaches 64

Traders also said importer demand for dollars was pressuring the rupee although they expected that to wane through the session, allowing some recovery in the domestic currency.

Reuters | Aug 26, 2013, 11.26AM IST

MUMBAI: The rupee dropped sharply to 64.20 per dollar in late morning trade on Monday on good demand for the US currency from banks and importers due to rise in crude oil prices. 

The rupee resumed lower at 63.65 per dollar as against the last weekend's level of 63.20 at the Interbank Foreign Exchange(Forex) Market and dropped further to 64.20 at 1040 hours, showing a fall of 100 paise or 1.58 per cent. 

Oil prices climbed in Asian trade today as disappointing US housing data tempered expectations of stimulus tapering by the Federal Reserve. 

R.K. Tomar

VHP yatra: Togadia, Singhal arrested as Ayodhya turns into fortress

LUCKNOW: Vishwa Hindu Parishad's leader Praveen Togadia was on Sunday taken into preventive custody by the Uttar Pradesh police ahead of the controversial yatra in Ayodhya, CNN IBN reports.

The arrest came as the Hindu rightwing organisation decided to defy the state government's ban on the Kosi yatra fearing it will trigger communal disharmony.

Shortly after Togadia's arrest, VHP president Ashok Singhal was detained at the Lucknow airport on landing and was asked to return to New Delhi.

The Uttar Pradesh police earlier arrested hundreds of saints and VHP activists as they tried to march towards Ayodhya for the proposed '84 kosi parikrama' (procession).

Police officers said 46 saints were arrested in Kanpur while 42 were nabbed in Agra.

Security and checking at the borders of Uttar Pradesh with Madhya Pradesh, Uttarakhand, Bihar and Chhattisgarh were stepped up. In all, 339 saints have so far been held from Agra, Jhansi, Kanpur, Banda, Fatehpur, Basti and other districts, home department officials told IANS.

Additional security forces were sent to Ayodhya, Ambedkarnagar and Gonda, police officials said. Saturday, only 80 percent of state roadways bus fleet plied on the Faizabad route where more than 52 check points and barriers were erected. (With inputs from agencies)

Pradeep Kumar Shukla
PGDM 1 sem

Explore new avenues for revenue, RBI tells govt:

       RBI warns that the government may find it difficult to stick to its fiscal deficit target in the current fiscal year...

 

           The Reserve Bank of India (RBI) warned on Thursday that the government may find it difficult to stick to its fiscal deficit target in the current fiscal year, given the impact of the economic downturn on tax collection and the depreciation of the rupee on the import bill, and called for alternative sources of revenue to be tapped. 

         RBI suggested strategic planning, including larger dividend payouts by cash-rich public sector units and stake sales in state-run companies that are likely to receive investor interest and attract higher prices.

         The national budget unveiled in February projected the fiscal deficit at 4.8% of gross domestic product (GDP), relying on higher tax revenue and disinvestment proceeds, compared with 5.2% in the year ended March. The gvernment also counted on receipts from telecommunication licence auctions and reduction in subsidy costs.

        “However, as the Budget relies largely on revenue-led fiscal consolidation, its success would depend on the revival of investment climate and growth,” RBI’s annual report said

Economic growth slowed to 5% in the year ended March, and RBI forecast it to improve only marginally to 5.5% in the current year.

         “The economy is currently cruising in slow speed mode along a rough road. Strategically, it is necessary to first pitch the rough spots by putting in place a set of complimentary policies to address the structural constraints,” the RBI report said.

The central bank said that “with growth likely to be lower, it may be difficult to achieve the budgeted tax-GDP ratio of 10.9% even with the budgeted tax buoyancy of 1.4% during 2013-14”.

  

           The government plans to raise Rs.40,000 crore through disinvestment in government-owned firms and Rs.14,000 crore by selling its residual shareholding in non-government companies.

  

           Even as the government plans to contain subsidies at 2% of GDP through various measures, including a phased deregulation of diesel prices, “the volatility in the exchange rate may exert upward pressure on fuel and fertilizer subsidies in 2013-14”, RBI said.
 

           The under-recoveries of oil companies—the shortfall in revenue from selling oil products at below cost—have risen sharply due to exchange rate depreciation and a rise in global crude oil prices, combined with lagged adjustment of prices and vestiges of administered price mechanisms prevailing in the sector.


GAURI KESARWANI
PGDM- Ist sem.
Aug, 23rd-2013.

CAG has copies of missing coal files.

New Delhi: A senior official of the Comptroller and Auditor General of India (CAG) has said that the auditor is in possession of all the “key documents” related to the allotment of captive coal blocks between 1993 and 2012. The official did not want to be identified.

CAG audited the entire process of coal block allotments and came out with a report last year that said the process was flawed and possibly fraudulent, and had caused the government exchequer a notional loss to the tune of Rs.1.86 trillion.

“It is our practice to retain copies of all the key documents pertaining to an audit report. These are the documents that are crucial to the report,” the CAG official said.

On Tuesday, the government said that it will make “all possible efforts” to locate the files that went missing.

“As the investigation progresses, if additional documents are called for by CBI (Central Bureau of Investigation), the ministry would supply them to CBI and if any document is not available, it shall make every effort to trace and supply the same to CBI,” coal minister Sriprakash Jaiswal said in a written statement to the Rajya Sabha on Tuesday.

MD NAUSHAD ALAM,

PGDM 1 SEM.

Live Market Updates: Rupee volatile; Sensex up 331 pts, Nifty races towards 5400

It is a volatile session for the rupee with no clarity forMoneycontrol Bureau
Live Market Commentary

1:50 pm Big deal: JP Associtates jumps 6 percent on the BSE as the deal worth Rs 3700 crore with UltraTech for cement stake sale in final stages, reports CNBC-TV18 quoting sources. The company is planning to sell 4.8 mt cement plant in Gujarat. According to sources, the deal will help to cut JP Associates’ debt which currently stands Rs 63,000 crore.
1:40 pm Buzzer: Hyderabad-based generic drugs major Dr Reddy's Laboratories has voluntarily recalled 3 lots of Ranitidine Hydrochloride tablets in 150mg strength in the US market, according to the US Food and Drug Administration.

The drug regulator stated that the company had initiated the recall of the antacid tablets earlier this month due to microbial contamination of non-sterile products.

"A lot of raw material used in the manufacture of Ranitidine was positive for Pseudomonas sp," US FDA said. The stock is up 3 percent on the BSE.

1:30 pm Precious metals: Exports of gold jewellery from India fell 70 percent in July due to non-availability of the raw material, while silver jewellery shipments more than doubled in the same period, the Gems and Jewellery Export Promotion Council (GJEPC) said.

Shipments of gold jewellery fell to $441.4 million in July from the USD 1.5 billion in the year ago period, the total gems and jewellery exports fell 17 percent to USD 2.49 billion, the GJEPC said in a statement on Thursday.

Gold imports into India are expected to re-start by next week after the central bank clarified a new rule that brought the flow of the precious metal into the world's top gold consumer to a standstill at the end of July.

Silver jewellery exports surged 184 percent to USD 109.69 million, the GJEPC said.

1:20 pm Update: L&T Construction, part of the USD 14 billion Larsen and Toubro Ltd, has bagged orders worth a total of Rs 1,504 crore, which include a major project contract from Tamil Nadu Transmission Corporation, the company said today.

Larsen and Toubro Construction has secured new orders worth Rs 1,071 crore, which include a major order from Tamil Nadu Transmission Corporation Ltd for supply, erection, testing and commissioning of 400kV double circuit quad line of 274 km length in Tamil Nadu, a company statement said.

"The order involves turnkey construction along with supply of towers, conductors and insulators. The project is scheduled to be completed in 18 months," it said.

 1:10 pm Diesel price hike? Adding to the chorus of a possible diesel price hike , Jal Irani, managing director, oil & gas research, Macquarie says the government is likely to hike prices by Rs 2-3 per litre.

Speaking to CNBC-TV18, Irani adds that the steep correction seen in the Indian currency has made a fuel hike a desperate need of the hour.

"With the rupee depreciating so sharply within such a short period of time, there is certainly a significant need for the same. I would be surprised if there is Rs 5-7 hike. This is the first time I have heard of it and it’s falsely going to build-up expectations. I think the more likely scenario is Rs 2-3 per litre, which will be adequate to sentimentally swing around these stocks," Irani says.

Irani further adds that investors should now be looking at oil marketing companies (OMCs). He believes the volatile stocks that are down right now, pose very good buying opportunity.


 with parliament not functioning and sources saying PM has directed DTC not be taken up at cabinet today, there are no big triggers for the market. There was a mild recovery witnessed on Dalal Street as the indices slip into the green.

The Sensex is up 331.35 points or 1.85 percent at 18237.26, and the Nifty is up 87.50 points or 1.65 percent at 5390.05.

About 1032 shares have advanced, 954 shares declined, and 142 shares are unchanged.

It is a volatile session for the rupee with no clarity form the Fed and tepid global cues. The currency breached the 65 per dollar level in early trade, recovered marginally and then hit a low of 65.56 intra-day. The 10-year bonds were lower following the extended fall in the rupee and the continued bullishness in crude prices.

Meanwhile, German flash composite PMI rose to 53.4 in August from 52.1 in July. German stocks extended gains after the news and the euro rose to near session highs against the dollar.

Most of the auto stocks are struggling in trade. Maruti, M&M and Hero MotoCorp are down between 1-3 percent. CLSA has downgraded Hero MotoCorp to sell from underperform with a target of Rs 1730.

Metal stocks dazzle as Tata Steel , Sesa Goa and Hindalco gain 4-8 percent as the China August HSBC flash manufacturing PMI data came in at a 4-month high of 50.1.






AKANKSHA SHANU
PGDM 1 SEM.