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FM, bankers expect stable interest rates in near future |
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New Delhi, May 1: Easing concerns of banks raising interest rates, Finance Minister P Chidambaram today said he does not expect an increase in lending rates any time soon.
Echoing Chidambram's comments, prominent bankers also said the rates are likely to be stable in near-term.
Briefing reporters after a meeting with PSU bank heads, Chidambaram said, "They (PSU bankers) are happy that only the Cash Reserve Ratio has been hiked and policy rates have been untouched. They do not expect the CRR hike to impact interest rates. So going forward, in the reasonable future, I do not expect an increase in interest rates by public sector banks." He said loan growth by banks is likely to be slightly higher than RBI's projection of 20 per cent this fiscal.
A change in policy on housing loans by RBI would lead to more loans to this sector without a hike in rates, he said.
"Bankers were particularly happy that there has been some change in policy regarding housing loans...So this means that the housing sector can expect higher credit flow without impacting the interest rates," Chidambaram said.
In its annual policy, RBI has increased CRR --proportion of deposits of banks that is kept with the apex bank-- by 0.25 per cent, which is likely to drain liquidity system by Rs 9,000 crore.
Earlier in the month, the the apex in an unscheduled move raised CRR by 0.50 per cent in two tranches in view of high inflation. A 0.50 per cent hike is expected to suck out over Rs 18,000 crore from the system.
After a hike in CRR in three tranches, there has been concerns of banks raising interest rates.
In its annual policy, RBI had also categorised housing loans up to Rs 30 lakh as lower risk weight against present Rs 20 lakh and allowed urban cooperative banks to lend up to Rs 50 lakh in tier II cities for housing. |
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Major airlines to raise fares by at least 10 per cent
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New Delhi, May 1: Air travel is going to be dearer as major airlines have decided to raise the fares by at least 10 per cent besides increasing the fuel surcharge.
The move by Air India, Jet Airways, Spicejet and Kingfisher comes in view of rise in prices of aviation turbine fuel by over nine per cent in line with the increase in international crude oil rates.
Jet Airways has decided to increase the basic fare of economy and business class tickets by about 10 per cent from Saturday.
It will also raise the fuel surcharge by Rs 150 on short-haul routes and Rs 350 on long-haul routes from the same day.
SpiceJet hiked fuel surcharge by Rs 150 on short-haul routes and Rs 350 on long-haul routes from today.
Air India has decided to raise the basic fare on all routes by 10 per cent and levy a fuel surcharge but has not yet announced the date from which it will be effective.
The price of ATF in Mumbai has been hiked by Rs 5,276 per kl to 60,467.58 per kl, an official of Indian Oil Corp, the nation's largest fuel retailer, said.
The crude oil has touched USD 120 a barrel mark in the international markets, putting financial pressure on oil firms.
Justifying the increase in fares, Jet Airways CEO W Prock Shamer said the increase in ATF hits the airlines very hard.
He acknowledged that the fare hike could slow down the growth rate of Indian aviation industry. |
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No panic over inflation; Growth to hold over politics: Kamath
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New Delhi, May 1: Terming Inflation as a key challenge, the Confederation of Indian Industry today said the government is worried, but not panicked, that rising prices may go to levels where controlling it could become difficult.
"The government is not in a state of panic, but worried that inflation could get to a level where controlling in becomes difficult" K V Kamath, the new CII President told Vaarttha.
He, however, sought to underplay the political controversy over the inflation saying that "growth momentum is too strong for political vicissitude to hold sway." Kamath, who also heads the country's biggest private sector lender ICICI Bank, noted that the current "inflationary momentum has caught us bit by surprise. Initially we thought it was only external factors and food driven but suddenly it has gathered momentum in the last 3-6 months." When asked whether he would have liked some inflation- controlling steps to be taken earlier, Kamath said, "very little" at this point of time, because a large part of the inflation is imported, and could not be helped.
He, however, exuded confidence that political will of the nation would help overcome the crisis saying, "it is very difficult challenge that they have taken -- control inflation and grow. And the great thing I have seen is alignment of interest, not only in parliament but also across political parties." "Growth rhetoric is too strong for political vicissitudes to hold sway," he said adding that industry was willing to contribute its part in meeting the challenge.
Asked if the government was bit late in bracing up to the challenge, he said the steps on supply side could have been taken possibly earlier. |
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SAIL to fight for its legitimate rights on Chiria: Roongta |
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New Delhi/Ranchi, May 1: Saying that Chiria mines is imperative for meeting steel behemoth SAIL's capacity expansion, a Parliamentary Committee has asked the government to intensify efforts to secure it for SAIL, even as the PSU vowed to fight for its rights on the said mines.
"The Committee strongly recommends with all conviction that the government should deal with the issue of national interest as the highest priority for grant of mineral concession of Chiria iron ore mine to SAIL," the Parliamentary Committee on Public Undertakings said in its latest report.
Pledging to fight for its right on Chiria, Steel Authority of India Limited (SAIL) Chairman S K Roongta said, "We have legitimate claim on Chiria and will fight for our rights. We will take whatever steps are necessary," he told reporters in Ranchi.
Roongta also made a maiden visit to the Chiria mines in Jharkhand's Singhbhum district yesterday and inspected the works at the PSU's Dobhil site.
Roontga said he would seek an appointment with Jharkhand Chief Minister Madhu Koda to discuss on the renewal of lease issue and expected a speedy solution to the issue so that the PSU's expansion plans worth Rs 54,000 crore did not get delayed.
"When the steel prices were low four or five years ago nobody showed any interest (for Chiria), but we protected and maintained it. So this should be kept in mind," he argued.
SAIL has been demanding renewal of its 10 leases in Chiria mines. |
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Sino-India border trade at Nathu La postponed |
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Gangtok, May 1: The annual Sino-India border trade at Nathu La, which was to be reopened today, has been postponed following Commerce ministry's communique to the Sikkim government, official sources said here.
"We have received a fax message from the Union Commerce ministry late last evening informing about the postponement of the re-opening of the border trade at Nathu La," the District Collector (East) Vishal Chauhan told PTI here.
The re-opening of annual trade at Nathu La may take place on May 19, he said.
The district administration would continue with the processing of the applications of the Indian traders for issuance of the travel and security passes in order to enable them to take part in the border trade this year, Chauhan said. |
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Mukesh Ambani bats for training of youth |
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New York, May 1: India faces two major challenges educating and imparting training to young people to enable them to effectively participate in the fast growing economy of the country, Reliance Industries' Chairman Mukesh Ambani has said.
After receiving award from the American India Federation (AIF) for his economic and philanthropic commitment to the country last night, Ambani called for encouragement to the organisation which work to help young people achieve their dreams through projects that focus on education and developing skills.
This is important, he added, as millions would be joining the work force in years to come.
In this context, Ambani praised the work being done by the foundation which gives grants for education, livelihood and healthcare projects. "I want to congratulate the AIF leadership for what they have achieved on the ground in a short span of seven years." The foundation honoured Ambani along with Chairman of the General Electric (GE) Jiffrey Immelt at its annual dinner gala, where it raised a donation of about two million dollars.
About 900 corporate leaders, philanthropists and community leaders attended the dinner at which the foundation explained its programmes with the expectation that the presentation would impress the donors.
Immelt said by working with organisations like AIF, "we can ensure India retains and builds on its competitiveness in the global market place." AIF had raised 11.5 million dollars last year and more than 10 million a year before. Last year, it had organised fund raisers in six American cities and this year it plans to do so in eight cities. |
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