Result Update

Karur Vysya Bank The bank has reported 54.76% jump in net profit for the quarter ended September 2006 at Rs.42.56 crore ( Rs.27.50 crore). While the deposits grew by 27.47% advances grew by 25.77%. The capital adequacy ratio of the bank stood at 14.51%. The net NPA stood at 0.49%. UCO Bank The bank has shown flat net profit at Rs.100.69 crore for the quarter ended September 2006 as against Rs.97.88 crore for same period last year. While the gross NPA stood at 3.36% the net NPA stood at 2.02%. The capital adequacy ratio stood at 12.89%. Total business stood at Rs.97,565 crore. Deposits stood at Rs.56,800 crore and Advances stood at Rs.40,765 crore.

Important Events

Mid-term review of Monetory Policy 2006-07 No change in bank rate, CRR and Reverse Repo rate. Repo rate (the rate at which RBI lends money to banks) increased to 7.25% from 7%. Resident individuals would be free to remit upto US$50,000 per financial year as against the earlier limit of US$25,000. The present facility of $10,000 per year for private travel will continue on a self-declaration basis. All Foreign exchange earners may retain upto 100% of their foreign exchange earnings in their Exchange Earners' Foreign Currency Accounts (EEFC). GDP growth forecast at around 8% during 2006-07. Inflation to be contained within 5 to 5.5% during 2006-07 Banks can borrow from their overseas branches and correspondent banks upto 50% of their unimpaired Tier-I capital or $10 million, whichever is higher, as against the earlier limit of 25% . This includes borrowings for financing export credit, ECBs and overdrafts from their head office or nostro accounts. The earlier limit of 25% was excluding borrowing for export credit now this has also been caped. Corporates can raise an extra $250 million in external commercial borrowings (ECB) over the existing limit of $500 million under the automatic route, in a financial year Prepayment of ECBs upto $300 million (earlier cap of $250 million) without reference to the central bank has also been okayed. To help indian companies move abroad, the RBI has lifted the limit on credit and non-credit facilities extended by banks from 10% to 20% of their unimpaired capital. Mutual funds can now invest $3 billion (earlier $2 billion) overseas.