CRR hike may not contain inflation

KOLKATA, Jan 30 (PTI): The city’s industry chambers feared that the sharp spurt in inflation in recent months may not be contained by the hike in CRR by the Reserve Bank of India on Friday.

“With the increase in CRR about Rs 36,000 crore of excess liquidity has been removed from the system, which may not ultimately be able to contain inflation at the desired rate,” Bharat Chamber of Commerce president Pavan Poddar said in his reaction.

RBI raised CRR of scheduled banks by 75 basis points from 5 per cent to 5.75 per cent in two stages in the third quarter review of the monetary policy on Friday to suck excess liquidity and control inflation.

He said RBI had sought to maintain an interest rate environment consistent with price and financial stability and keeping this in view the bank rate, repo and reverse repo rates were left unchanged.

Bengal National Chamber of Commerce and Industry criticising the RBI move said “For managing recovery from the present sluggish state, our economy desperately needs flow of liberal credit to the productive sectors.”

SEBI calls for online investor complaints

MUMBAI, Jan 30 (PTI): Market regulator SEBI on Friday directed the depositories – NSDL and CSDL – to disclose details of complaints lodged by investors against intermediaries, on their website.

The move is aimed at increasing transparency in the grievance redressal mechanism and improving the general functioning of the market by providing investors the wherewithal to make an informed choice.

“Depositories shall henceforth disclose the details of complaintslodged by beneficiary owners/ investors against depository participants in their website. The aforesaid disclosure shall also include details pertaining to arbitration and penal action action the DPs,” the a SEBI circular said.

Nifty ignores RBI move, ends up as banks rule out rate hike

The benchmark Nifty saw a significant recovery in the last couple of hours and closed marginally in the green. After the initial jolt from a 75 bps cash reserve ratio hike in the credit policy, the Nifty recovered over 100 points from the day’s lows and the Sensex over 350 points to close at 4882 and 16357 respectively. The markets completely discounted the 75 bps CRR hike by Reserve Bank of India (RBI) while banks also ruled out the rate hike post the RBI move.

The RBI hiked the CRR by 75 bps to 5.75% from 5%. The move will be implemented in two stages; 50 bps hike w.e.f February 13 and 25 bps hike w.e.f February 27. This CRR hike will absorb Rs 36,000 crore of excess liquidity from the markets. However, the RBI kept repo and reverse repo rate unchanged. The revision in GDP forecast to 7.5% from 6% was a surpise for the markets.

Keki Mistry, Vice Chairman and Managing Director, Housing Development Finance Corp (HDFC): "Actual interest rates, in terms of banks hiking rates, I personally don't see that happening immediately. I think banks will start exercising a little more caution keeping in mind the fact that RBI is so concerned about inflation and therefore will start acting. But I don't see them immediately hiking the rates because they are sitting on a lot of liquidity."

3G auction may be postponed till December 2010: Sources

The government's auction of third-generation wireless spectrum doesn’t seem to see the light of the day anytime soon. It is learnt that the auction is likely to be postponed further till December 2010.

The Defence Ministry has also said that there would be no spectrum till September 2010, sources inform CNBC-TV18.

The Law Ministry, sources say, has said that there are legal challenges in the auction. It has also said that the legal issue were due to delayed availability of the spectrum.

Soruce:http://www.moneycontrol.com