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Strategies & Market Trends : India Coffee House

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To: Mohan Marette who wrote (4365)	5/26/1999 10:39:00 AM
From: Mohan Marette	Read Replies (2) of 12475

5/26/99 09:01 ET INDIAN BANKS LAP UP LONG-DATED GOVT SECURITIES NEW DELHI, May 26, 1999 (Asia Pulse via COMTEX) -- Flush with liquidity, India's leading commercial banks are lapping up long-dated G overnment securities having a maturity profile of 12 to 14 years. Bank officials said one of the reason for bank's increasing affinity towards long-marturing securities was the slow pick-up in credit by the industry. The most favoured securities by banks are GOI 2011 and GOI 2013 having a face value of 12.32 per cent and 12.40 respectively as they offer rates above even the prime lending rates (PLR) of many of these banks at 12 per cent. "Investment in G-Secs or sovereign securities are risk free with no stipulation to guard against no-performing assets (NPA), an official with State Bank of India (SBI) said adding that the returns were attractive enough fro banks to put in huge investments in these securities. Over the last few days, volumes in the long-tenure Government securities were recording daily volumes above Rs 1000 million mark, bringing down the yield to maturity in the two instruments. (PTI)

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