Bandh Hits Inter-bank, Clearing

Mumbai, July 30: | Updated: Jul 31 2003, 05:30am hrs
Inter-bank and cheque clearance activity almost came to a halt on Wednesday as the bandh sponsored by Shiv Sena and Bharatiya Janata Party (BJP) combine affected the transport system in the commercial capital.

MICR (cheque) clearance was affected totally. There was no inter-bank clearance which used to be of the order of Rs 100 to 200 crore in the city. However, under high-value clearances, capital market transactions were cleared to a great extent, an RBI spokesperson told FE.

The RBIs sale of State Development Loans 2013 and repos auctions were through without any hassle. The sale on tap of 6.20 per cent 10-year State Development Loans 2013 in respect of 28 state governments received overwhelming response of about Rs 18,500 crore. The issue opened for subscription on July 30, 2003 for a target amount of Rs 8,000 crore, RBI said in a release.

The on-tap sale has been closed today. Excess subscriptions are being refunded to the applicants after making partial allotment in respect of states whose loans are oversubscribed, RBI added.

In the repos market, 37 applications for Rs 17,780 crore were received and accepted by the RBI. There were two reverse repos applications for Rs 1,220 crore which were accepted by RBI at seven per cent.

The reverse repos bids might be in the wake of urgent need of funds by some banks, when there was no much activity in the call and government securities markets. Even in the forex markets, there were not many transactions as there was no corporate demand, a dealer said.

The rupee closed at Tuesdays closing levels of 46.12. Due to thin trades there was not much volatility in rupee and the movement was limited to one paise, a dealer said.

There was no active participation by banks in the securities market as attendance was thin. Volumes were low while a few tried to take advantage of the thin market, a state-run bank dealer said.