Banking and Financial News – 19 May 2014

Extend Trading Hours for Commodities Market: Government Panel (NDTV Profit) - A government panel has recommended extending trading hours at commodity bourses mainly to overlap with Asian and Australian markets, a large trading base that has been hitherto untapped and enhance global competitiveness. The five-member panel, headed by D S Kolamkar and set up against the backdrop of Rs. 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL), has come out with 14 recommendations primarily aimed at ensuring better price discovery mechanism in the domestic commodity trading market.

RBI Allows LLPs to Carry Out Financial Commitment Abroad (NDTV Profit) - The Reserve Bank has allowed Limited Liability Partnership (LLP) firms to carry out financial commitment to/ on behalf of joint ventures (JVs) or wholly-owned subsidiaries (WOS) of the Indian companies abroad.

LLP is a form of partnership where all partners have limited liabilities. It provides that one partner would not be responsible or liable for another partner's misconduct or negligence.

Oil Companies Get Rs. 8,000 Cr as First Tranche of Q4 Subsidy (NDTV Profit) - The Finance Ministry has paid Rs. 8,000 crore to state-run oil marketing companies as part subsidy (Out of the total Rs.24,000 cr.) for the March quarter of 2013-14 fiscal. Oil subsidies are given to state-run oil marketing firms like IOC, BPCL and HPCL for selling diesel, domestic LPG to households and kerosene through the PDS system (Public Distribution System) below cost.

ICICI Bank announces cut in home loan rates (Hindustan Times) - ICICI Bank, the largest private sector lender, has announced a 0.10% reduction in home loan rates for a limited period, bringing them on par with bigger rival State Bank of India. ICICI Bank will offer home loans of up to Rs. 75 lakh at 10.15%, the same rate as SBI, between May 15 and June 30. For women borrowers, the Chanda Kochhar-led bank will offer housing loans under Rs. 75 lakh at 10.10%, it said on its website.

These are floating rates, which will change as per the base rate or minimum rate of lending at the bank.

Moody's rates India 'Baa3', the lowest investment-grade with a 'stable' outlook (Hindustan Times) - The Bharatiya Janata Party's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges, Moody's investor service said on Monday.

Rival rating agency Standard & Poor's also rates India at the lowest investment grade, but with a "negative" outlook.

India tops US, China as investment destination (Hindustan Times) - After a spate of bad news on the Indian economy, there is finally something to cheer about. Global consultancy firm Ernst & Young (EY) has said that India is the most attractive investment destination, ahead of China and the US, after the government recently relaxed the policy on foreign investment.

Important Financial Terms in the News explained.

Bourse - A French word, meaning – A market organized for the purpose of buying and selling securities, commodities, options and other investments. A bourse is more commonly known as a stock exchange.

Limited Liability Partnership ((LLP) is a form of partnership where all partners have limited liabilities (similar to a Limited Liability Company). It provides that one partner would not be responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1932, in which each partner has joint and several liability.

Partnership is defined by the Indian Partnership Act, 1932, It is the relation between persons (Minimum 2, Maximum 20) who have agreed orally or in writing, to share profits of the business carried on by all or any of them acting for all.

Floating Interest Rate: An interest rate that is allowed to move up and down with the rest of the market or along with an index. This contrasts with a fixed interest rate, in which the interest rate of a debt obligation (Loan) stays constant for the duration of the agreement. A floating interest rate can also be referred to as a variable interest rate because it can vary over the duration of the debt obligation.

Short Forms / Acronyms

• NSEL - National Spot Exchange Ltd

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Courtesy : NDTV Profit , Hindustan Times