RBI Rate Hike

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RBI Rate Hike

Reserve Bank of India governor, Dr. Y. Venugopal Reddy formerly released the “First Quarter Review of Annual Monetary Policy” for 2008-2009 on 29th July 2008. Some highlights of the policy declaration are stated below.

Bank Rate has been kept unchanged, so has been the LAF and the Reverse Repo Rate. Repo Rate has been raised to 9% from 8.5 %. This has been a hike of 50 basis points. Cash Reserve Ratio has also been raised to 9%.This has been a 25 basis point hike. This hike will come into effect from 30th August 2008.

RBI has scaled down GDP growth projection to around 8% for the 2008 to 2009 period. This was previously pegged at the 8.0 to 8.5 % range. This estimate has been made in exclusion of the likely effects of external or domestic shocks.

The immediate after effects of this restraining monetary policy announcement was a market slump. Sensex fell by over 500 points below the 14,000 mark. Rate sensitive banking plummeted along with auto stocks and realty stocks. Reliance Industries slipped. Reliance infrastructure and ICICI Bank also suffered losses. Tata Motors, Hero Honda Motors, Maruti Suzuki India and Mahindra & Mahindra all suffered declining auto stocks. Some major companies whose realty stocks slid were Indiabulls Real Estate, Unitech and DLF.

Fundtech Asia-Pacific gets Gil Gadot as MD

Gil Gadot took over as the as new managing director of the Asia-Pacific wing of Fundtech on 29th July 2008. It may be noted that Fundtech is a leader in the banking solutions business related to global transactions. Gil Gadot is incidentally one of the co-founders of Fundtech. Mr. Gadot has been involved for long in the promotion of the company's business interests, mostly via geographical market expansion and the introduction of new products.

It may be noted that, Fundtech serves 14 countries including India, Australia, Singapore and Japan. The services provided by the company include cash management, financial supply chain management, global payments and CLS.

Bank of India posts around 78% hike in Q1net profit

Bank of India has posted a 78.28% growth in its net profit (compared to the same reference period last year) for the first quarter, which ended on 30th June 2008. The amount of net profit stood at ` 561.95 crore. This news was carried in the Times of India dated 29th July 2008.

Kotak Mahindra Bank reports around 3% hike in Q1 net profit

Kotak Mahindra Bank has reported a ` 149.84 crore worth of consolidated net profit for the Q1 period of the present FY. To be exact, the bank has registered a 2.67% hike in its net profit in comparison to the same reference period, last year. This news report appeared in the Times of India dated 29th July 2008.