April 2: Bank rate cut by half a percentage point to 10 per cent, effective April 3.

April 3: Fixed repo rate reduced by one percentage point to 7 per cent.

April 11: The yield to maturity was fixed at 12.15 per cent for securities of 10 years and above in fiscal 1998. YTM for papers with maturity of less than one year pegged at 9.43 per cent.

April 20: FIIs with a ceiling of 30 per cent investment in debt instruments permitted to invest in government securities within the ceiling of 30 per cent on amendments to Sebi'sFIIs Regulations, 1995.

April 29: Bank rate further reduced by one percentage point to 9 per cent. Export credit refinance restored to 100 per cent (against the prevailing 50 per cent) of the increase in outstanding export credit eligible for refinance over the level of such credit on February 16, 1996, with effect from the fortnight beginning May 9, 1998.

Interest rate on pre-shipment export credit up to 180 days reduced from 12 per cent to 11 per cent. Interest rate against incentives receivable from government covered by ECGC guarantee in respect of pre-shipment credit up to 90 days reduced from 12 per cent to 11 per cent.

The minimum size of operation per transaction by entities routing their lending through primary dealers in the call money market reduced from Rs 5 crore to Rs 3 crore and minimum lock-in period for CDs and MMMF units reduced from 30 days to 15 days, effective May 9, 1998.

Greater flexibility allowed to banks with regard to deposits and loans: the minimum maturity period ofterm deposits reduced to 15 days; banks allowed to determine penal interest rates for premature withdrawal of term deposits and NRE deposits; banks asked to offer the same rate on deposits of the same maturity irrespective of the size removed in case of deposits of Rs 15 lakh and above.

Interest rates on loans up to Rs 2 lakh not to exceed the PLR of the concerned bank instead of a specific uniform rate for all banks and all advances against term deposits would be at an interest rate equal to the PLR or less.

Interest rate ceiling on FCNR (B) deposits of one year and above increased by 50 basis points. Rates on deposits below one year reduced by 25 basis points with banks permitted to fix their own overdue interest rates in respect of FCNR (B) and NRE deposits.

April 29: Reverse repos with PDs in specified securities dispensed with, instead liquidity support against the holdings of securities in subsidiary general ledger accounts provided; 182-day T-bills' auctions on a fortnightly basisreintroduced; periodicity of holding 364-day T-bill auctions changed to monthly from fortnightly; FIIs permitted to purchase/sell T-bills within the overall approved debt ceilings.

RBI proposes introduction of one-day repos (including reverse repos) to absorb or infuse liquidity into the system. The ratio of current investments for banks in approved securities proposed to be progressively increased to 100 per cent in the next three years in line with the best international practice.

April 30: Fixed repo rate reduced by one percentage point to 6 per cent.

May 18: RBI announces decision to release the remaining two-thirds of the balances impounded between May 4, 1991 and April 17, 1992 under 10 per cent incremental CRR on NDTL in 12 equal instalments over the period May 1998 to March 1999.

June 11: RBI proposes introduction of a temporary new scheme of concessional interest rate on "incremental" exports. Under this scheme, the interest rate to be charged by banks on "incremental"exports (over the base year level of exports in 1997-98) was proposed to be fixed at 6.5 per cent for pre-shipment and post-shipment credit.

Following the policy decisions taken by RBI/Sebi and amendments to Sebi (FIIs) Regulations, 1995, the RBI guidelines issued on March 8, 1997, specifying the manner of transactions by the FIIs were amended to enable equity funds to invest in government dated securities and T-bills, both in the primary and the secondary markets, within their debt ceiling of 30 per cent.

June 13: Fixed repo rate reduced by one percentage point from 6 per cent to 5 per cent, effective June 15, 1998.

June 23: SDs permitted to issue CPs under certain guidelines. In order to be eligible, SD required to obtain a specified minimum credit rating from an agency. At the time of issue of CP, the credit rating obtained should be current and not more than two months old. The CP would be issued for maturities between 15 days and more, but less than one year; every issue of CPincluding renewals will be treated as a fresh issue. RBI said the CP could be issued in multiples of Rs 5 lakh, but the amount to be invested by any single investor should not be less than Rs 25 lakh.

July 18: The scheme of concessional credit for "incremental" exports dropped.

August 6: Export credit refinance rate reduced to 7 per cent. Revised rate valid up to March 31, 1998.

August 20: CRR hiked to 11.5 per cent, repo rate raised from 5 per cent to 8 per cent. FIIs permitted to take forward cover from ADs in respect of the incremental value of their portfolio (equity) investments with effect from June 11. The facility of rebooking cancelled contracts for trade-related transactions covering imports withdrawn. However, the contracts allowed to be rolled over on or before maturity. (Facility for rebooking cancelled contracts continued to be available for exports).

The facility for splitting forward and spot legs of a commitment withdrawn with immediate effect. Exporters permittedto use the balances in EEFC accounts for all business-related payments in India and abroad at their discretion including payments of airfare and hotel expenditure. Exporters were advised that to the extent possible, balances available in EEFC accounts should be used for effecting payments abroad with a warning that willful delays in repatriation of export proceeds will lead to withdrawal of the facility of maintaining an EEFC account.

ADs were advised to report (at close of business every day) their open position as at 10.00 am as also their peak intra-day position.