Category Archives: Interest Rates

RBI raises Interest rate by 50 basis points

India’s central bank Tuesday took measure that the goveenment failed to make ,it  hiked its key rates by 50 basis points each in the 11th such exercise since January 2010 to tame inflation, setting the stage for commercial banks to raise their interest on personal and corporate loans.

The repurchase rate, or the interest levied on short-term borrowing by commercial banks, has been revised to 8 percent from 7.5 percent, while the reverse repurchase rate — the interest on short-term lending — was hiked to 7 percent from 6.5 percent.

9.5 Per Cent Interest for our Provident Fund

So RBI which raised almost 25 basis points on the Repo and Reverse Repo rate , Government announced that 4.75 Lakh people who have invested in Provident Fund will get 1 Percent more interest from now ,On Thursday, the government approved an increase in interest rates on provident fund balances to 9.5% for the current financial year, from 8.5% in the past few years. The move will result in a percentage point increase in interest rate on the entire balance lying with the Employees Provident Fund Organization or approved provident fund trusts. This is the highest payout in five years.

Some Story behind the raise of interestSource:Economictimes.

Last September, the EPFO had declared a 9.5% interest for 2010-11, against the 8.5% it had been paying since 2005-06, after discovering a surplus of Rs 1,733 crore in its interest suspense account following a change in accounting procedure.

The calculation was questioned by the finance ministry, which went on to seek a snap audit by the Comptroller and Auditor General of India , or CAG.

The CAG audit found that as on March 31, 2010, of the over-five crore EPF accounts, 4.72 crore accounts had not been updated, or credited interest.

Based on this, the CAG had said that the surplus could not be verified as a large number of accounts had not been updated.

It, however, did not go into the question whether there would be a surplus to justify the higher payout once accounts had been updated.

Based on the findings, the finance ministry had refused to ratify the decision to pay 1% higher interest. In the absence of a surplus, the government would have to provide funds to bridge the deficit.

The EPFO has now convinced the ministry that the surplus amount will be available even after accounts are updated.

The organization had updated 1.1 crore accounts by the end of last year. What is not clear yet is the action the ministry will take if the EPFO fails to update accounts within the stipulated time.

It is doubtful whether the EPFO has the means to work on 4.7 crore accounts in such a short time. “We will have to try our best,” another official said.

RBI raises Repo and Reverse Repo Rate by 25 Basis Points

With Inflation raising UP and Down and Oil prices going up , the Reserve Bank of India informed today that they have hiked key policy rates for the eighth time since last March by 25 basis points in its mid-quarterly review on Thursday , The repo and reverse repo rates were hiked by 25 bps to 6.75 per cent and 5.75 per cent, respectively. CRR was left unchanged at 6%.
What is Repo Rate – Repo rate is the rate at which the RBI lends to banks against securities.
What is Reverse Repo Rate – The reverse repo is the rate it pays to banks for deposits.

State Bank of India reduces interest on bonds by 25-30 basis points – This is old News

Sorry this post was there in my database and got by mistake updated now – sorry about the confusion – originally they had the proposed interest rate and they changed it when the bond opened itself .State Bank of India informed the market that it has cut the interest rate on its proposed public issue of subordinated bonds aggregating up to Rs 10,000 crore by 25-30 basis points for retail investors.On bonds of 10 years duration (with a call option after five years) and 15 years duration (with a call option after 10 years), the bank will offer 9.75 per cent (10 per cent earlier) and 9.95 per cent (10.25 per cent) interest respectively.In the case of non-retail investors, the bank has left the interest rates unchanged, ie, at 9.3 per cent for 10 years and 9.45 per cent for 15 years.

Reserve Bank of India Raises Repo and Reverse Repo Rate by 25 Basis Points

RBI informed the market that in its quarterly monetary policy review which happened today Tuesday have soaring inflation stalks Asia’s third-largest economy.On behalf of that RBI raised repo and reverse repo rates by 25 basis points each.

>Repo rate , the one at which RBI lends to banks will now be 6.50%,
>Reverse repo,The rate banks receive for depositing funds with the central bank will be at 5.50%.
>Cash reserve ratio, the proportion of deposits that banks have to keep aside, was left untouched at 6%.


>They have also raised March inflation forecast to 7% from 5.5% .
>The central bank maintained that India’s GDP will grow at 8.5% for FY-2011.

RBI Hikes Repo and Reverse Repo by 25 BPS

RBI hikes Repo and Reverse Repo rates by 25 bps to 6.25% and 5.25% respectively; bank provisioning for teaser loans to increase to 2%.However, RBI left the CRR unchanged at 6%.
For FY11, the GDP forecast has been kept unchanged at 8.5%. FY11 M3 growth has also been kept unchanged at 17%. RBI has kept FY11 WPI (Old Series) forecast unchanged at 6% and FY11 WPI (New Series) forecast at 5.5%.

Shriram Transport Finance soars by 4.99 Percent

SHRIRAM TRANSPORT FINANCE which opened at 732 or so on Friday and had a low of 725 or was hovering at that rate until 2.00 or so in the noon and there was a sudden spurt in volume and the stock closed at 769.20 up by almost 4.99 percent or 36.55 Rs.

The only news that came out is that “Shriram Transport Finance, small and medium commercial vehicles financer, is increasing fixed interest-rate loans and reducing the exposure to floating-rate loans as it sees interest rates moving up.”

Reserve Bank of India raised Key Interest Rates

The Reserve Bank of India informed the market today that they have raised both Repo Rate and RRR, they have raised the key interest rates by more than expected and this is one of the main measure to control high inflation .

Repo Rate which is bank’s short term lending rate has been raised by 25 basis points to 5.75 percent and also it raised the reverse repo rate which is the Central bank that pays on bank deposits – by an unexpected 50 basis points, to 4.5 percent.Over here they expected only 25 basis points.They have left the cash reserve ratio unchanged at 6.0 percent, as expected.

Shriram Transport Finance Company NCD – Good to Invest

Shriram Transport Finance Company – They are the largest asset financing NBFC with a primary focus on financing pre-owned commercial vehicles*.They are among the leading financing institutions in the organized sector for the commercial vehicle industry in India for FTUs and SRTOs. They also provide financing for passenger commercial vehicles, multi-utility vehicles, three wheelers, tractors and construction equipment. In addition, They provide ancillary equipment and vehicle parts finance, such as loans for tyres and engine replacements, and provide working capital facility for FTUs and SRTOs. They also provide ancillary financial services targeted at commercial vehicle operators such as freight bill discounting and also market co-branded credit cards targeted at commercial vehicle operators in India, thereby providing comprehensive financing solutions to the road logistics industry in India. In addition, They also provide personal loans to the existing customers.
Shriram Transport Finance Company Limited NCD
NCDs aggregating upto Rs. 25,000 lacs with an option to retain over-subscription upto Rs. 25,000 lacs for issuance of additional NCDs aggregating to a total of upto Rs.50,000 lacs, including a reservation for Unsecured NCDs aggregating upto Rs. 20,000 lacs. The Unsecured NCDs will be in the nature of subordinated debt and will be eligible for Tier II capital.*NCD will be listed on NSE.
NCD Rating
The Secured NCDs proposed to be issued under this Issue have been rated ‘CARE AA+’ by CARE for an amount of upto Rs. 50,000 Lacs and ‘AA/Stable’ by CRISIL and the Unsecured NCDs proposed to be issued under this Issue have been rated ‘CARE AA’ by CARE for an amount of upto Rs. 50,000 Lacs and ‘AA/Stable’ by CRISIL for an amount of upto Rs. 50,000 Lacs
Issue Date
The Issue shall be open from May 17, 2010 to May 31, 2010 with an option to close earlier and/or extend upto a period as may be determined by our Board.
Pay-in date
3 (three) Business Days from the date of reciept of application or the date of realisation of the cheques/demand drafts, whichever is later.Deemed Date of Allotment Deemed date of allotment shall be the date of issue of the Allotment Advice / regret.
Options Available

Options Frequency of  Face Value &  Coupon(%) p.a. Effective Yield (%) p.a. Minimum Application Size In Multiples Of
Interest Paymnet Issue Price QIB/NII >5lacs QIB/NII >5lacs
1 ANNUAL Rs.  1000/- 9.00% 9.50% 9.00% 9.50% Rs.10000/- Rs.1000/-
2 SEMI-ANNUAL Rs.  1000/- 9.50% 10.00% 9.73% 9.96% Rs.10000/- Rs.1000/-
3 ANNUAL Rs.  1000/- 9.75% 10.25% 9.75% 9.75% Rs.10000/- Rs.1000/-
4 DOUBLE BOND Rs.  1000/- N.A N.A N.A N.A Rs.10000/- Rs.1000/-
5 ANNUAL Rs.  1000/- 10.25% 10.75% 10.25% 10.75% Rs.10000/- Rs.10000/-

Final Conclusion :

Shriram Transport corporation is considered one of the best NBFc in india and they are in this field for almost 3 decades now so no worry about the business they are doing , Its trying to raise 80 percent of the money for the NCD from Retail.Scheme wise it has 3 secured and 2 unsecured , the secured NCD is rated as CARE AA+ and Un Secured are rated as CARE AA.If we go by the rating company the retailers need not worry much as the un secured itself is not having much risk.The interest yield is on the higher side where a bank offers only 7.5 or so max but they offer anywhere from 9.5 to 10.5 on the secured side itself.On the Un Secured side the yield is really high anywhere from 10.75 percent to 11.25 percent.If there is a urgent need of liquidity arise we can sell this NCD in NSE which is very good option for the retailers.So this NCD offers both very good Return and also rated good by Care and has very good liquidity option for the retailers.

RBI has increased CRR and Repo and Reverse Repo Rate by 25 basis points.

Reserve Bank of India has raised the
>Reverse repo rate under the LAF by 25 basis points from 3.5 Percent to 3.75 Percent with immediate effect and also increased the

>Repo rate under the Liquidity Adjustment Facility (LAF) by 25 point from 5.0 Percent to 5.25 Percent with immediate effect. 

>Cash reserve ratio (CRR) of scheduled banks by 25 basis points from 5.75 Percent  to 6.0 Percent  of their net demand and time liabilities (NDTL) effective the fortnight beginning 24 April 2010.

Food Inflation at 17.70 Percent

Food Inflation data came oput today which was at staggering 17.70 percent compared to 16.35 percent.Reserve Bank of India (RBI) reviews its policy on April 20 not sure if they will wait till that rate for raising interest rates , we will see , but this is a sure sign of interest rates raising , already bank stock felt the ehat and it was stammered in todays market.

RBI raised Repo and Reverse Repo Rate by .5 Per cent

RBI announced as part of efforts to control inflation worries that it has

>It has to raise the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 4.75 per cent to 5.0 per cent with immediate effect.
>And also to raise the reverse repo rate under the LAF by 25 basis points from 3.25 per cent to 3.5 per cent with immediate effect.

These measures will try to stop the raising inflation but not sure to what extent , As liquidity in the banking system will remain adequate, credit expansion for sustaining the recovery will not be affected.It will also monitor macroeconomic conditions, particularly the price situation, and it might tale further action if its required.

CRR hiked by 75 basis points – RBI Announced

Credit policy meeting outcome has come out and they have raised the CRR by 75 basis points , RBI has increased cash reserve ratio by 75 bps to 5.75 Percent , the hike would happen in two stages, the first stage of hike of 50 bps will be effective from February 13 and the next 25 bps from February 27. RBI has not touched the the reverse repo rate which is at 3.25 percent and repo rate which is at 4.75 percent.

DCB offering Home Loan below 8 percent

DCB – Development Credit Bank which is a publicly listed private bank said that they are going to offer home loan rate below 8 percent , which is one of kind and think one of the lowest in the market but wait you knw how below 8 percent its just .05 percent down , anyway they are offering for 7.95 percent for the first year for loan amount upto 5 crore and after 1 year it will be back to floating interest rate that will be prevailing at that time.

Reserve Bank keeps all the Key Interest Rates Unchanged

Reserve Bank of India informed today that Central Bank after the Policy review today have kept all the 3 Key interest rates unchanged .
Reserve Bank of India (RBI) which took several mesaure starting almost from october 2008 have lowered all the Key Inetrest rates.

>Repo rate, or its key short-term lending rate, was cut by 4.25 Percent to 4.75 Percent.
>Reverse-repo rate was cut by 2.75 Percent since early December 2008 >Cash reserve requirement (CRR) (the proportion of deposits that banks set aside), was cut by 4 percent to 5 Percent .

Reserve Bank of India Cuts Repo and Reverse Repo Rates

Reserve Bank of India (RBI) informed yesterday that it has , cut its key short-term rates by 25 basis points each on Tuesday, 21 April 2009, to prop up growth amid global economic slowdown.
The repo rate, at which the RBI lends to the banks, was cut to 4.75%, and the reverse repo rate, at which the RBI absorbs excess cash from banks, was reduced to 3.25%.

SBI reduces Home loan interest rate to 8 percent

SBI informed the market yesterday that it has reduced the home loan rate at 8 percent compared to what it is now , the catch is its only for the first 1 year from the date of approval after that it will change to normal rate whatever it is at that time .This scheme again is not all the time if you have the loan bought between February 2 and April 30, 2009 then you can avail this offer.