Mumbai: The Reserve Bank of India (RBI) on Friday sold the first floating rate bonds in fiscal 2011 as part of its Rs12,000 crore bond auction that was fully subscribed by investors.
Investors offered Rs92.30 for each floating rate bond with a face value of Rs100. RBI auctioned Rs3,000 crore of such bonds along with Rs6,000 crore worth of a six-year bond and Rs3,000 crore of a 17-year bond.
Floating rate bonds are preferred by investors as the coupon is adjusted every six months, allowing them to avoid booking nominal losses in their books.
Separately, RBI said banks can now offer pre- and post-shipment export credit to certain sectors at their prime lending rate (PLR) minus 4.5% against PLR minus 2.5% earlier.
The sectors notified are handicrafts, carpets, handlooms and certain small and medium enterprises.
However, the export loan rate should not fall below 7%, which is the rate applicable for agriculture credit, RBI said.
“The banks may ensure that the benefit of the 2% interest subvention is passed on completely to the eligible exporters,” the notification said.
In a separate notification, RBI extended the special export credit compensation of PLR minus 2.5% to 30 June from 30 April earlier.
Sebi tightens power of attorney clauses
Mumbai: The Securities and Exchange Board of India (Sebi) on Friday warned brokers and depository participants not to exercise power of attorney (PoA) for off-market trades.
The regulator ordered brokers not to deny services to clients if they refused to execute a PoA in the broker’s favour. Sebi noted that clients were compelled to give irrevocable PoA to manage their demat accounts, whereby such powered even allowed brokers to open and close client accounts or trade on the clients’ account without consent.
Sebi ordered brokers to limit the scope of such a PoA for transfer of securities of clients towards margin or delivery obligations, pledging securities in favour of brokers for margin requirements for transactions in equity-related instruments such as mutual funds, public issues, rights, etc., and for meeting settlement obligations of the clients.