Mumbai, January 24
Zooming inflation, a build-up of inflationary pressures, and cues from global markets can impel the Reserve Bank to tighten its monetary policy stance, bankers said.

The apex bank's third-quarter review of its monetary policy, scheduled for Friday, is, therefore, being keenly watched as any hike in the cash reserve ratio -- the portion of deposits banks keep with the RBI -- or policy rates will push up lending rates in the banking system making home, auto and retail advances dearer to the common man, the bankers said.

"Signals of the monetary policy tightening in the US and China may add to pressure on the RBI to hike rates. Also, inflationary pressures are high. One can expect a 0.5 per cent hike in the CRR," IDBI Bank's executive director R K Bansal said.

Bansal said a marginal hike in the repo and reverse repo rates (at which the RBI lends and borrows) also could not be ruled out as the apex bank may want to signal an upward movement in interest rates going forward.

Skyrocketing prices of essential commodities and food items pushed up consumer price inflation to 16.81 per cent for the week ended January 9. WPI-based inflation expanded to a year's high of 7.31 per cent in December.

UCO Bank chairman and managing director S K Goel said a hike in CRR could be as high as 1-2 per cent and may be effected in multiple tranches.

"At this point, the RBI is focusing only on inflation.

The hike may come with a 1-2 per cent CRR increase. As far as policy rates are concerned, there may be a slight increase," he said.

Taking a cue from the RBI, banks could jack up their lending rates in the near future, Goel said, adding that, however, that this would depend upon the liquidity conditions of individual banks.

"Interest rates are always linked to the liquidity in the system. Once the apex bank absorbs the liquidity, bank lending rates tend to move up," Goel said.

With the economy on the recovery path, credit demand in the system had started picking up and is likely to improve significantly in the next few months, he said.

SBI chairman O P Bhatt, however, put forward a different view when he said recently that this would not be the right time for a CRR hike as credit growth is likely to pick up in the coming months. Regardless of the apex bank's monetary policy actions, interest rates in the system were unlikely to go up in the next six-months, Bhatt had said. — PTI

New Delhi, January 24
The NMDC's net profit has declined by 40 per cent to Rs 860 crore in the third quarter ended December 31, 2009. The company had reported a net profit of Rs 1,425 crore in the December quarter of 2008, according to a public announcement today.

The net sales of the company declined by 32 per cent to Rs 1,587.58 crore for the third quarter of this financial year.

The company further saidthe net sales for the three months ended December 31, 2009, included Rs 1,036 crore as a result of price variations during April to September, 2009.

"The net sales without the price variations will be Rs 1,301 crore compared to Rs 1,587 crore for the quarter ended December 31, 2009," the company added.

The board of directors of the company has also approved an interim dividend of 75 per cent on the paid-up equity share capital of the company for the financial year 2009-10.

The NMDC is set to file the draft prospectus with SEBI tomorrow for its estimated Rs 20,000 crore follow-on public offer. The government is selling 8.38 per cent of its stake in the miner. — PTI

New Delhi, January 24
Indications of the economy getting back on the rails are visible with reports suggesting that the Indian automobile industry is set to add 12 million more employees over the next five years.

While it has already employed an estimated 13 million people, a rush of new jobs is expected over the next two years with the Society of Indian Automobile Manufacturers (SIAM) saying that the auto industry will immediately hire 5 million employees by 2012.

Of these five million, roughly 25 per cent will be for managerial functions, 60 per cent for skilled labour, while the remaining 12-13 per cent will comprise unskilled labour.

At a conference meant to serve as a curtain-raiser for SIAM ’s upcoming first-ever seminar on human resource issues, senior HR professionals of the automobile industry held forth on a variety of issues concerning the sector.

According to S Y Siddiqui, managing executive officer - Administration (HR, Finance and IT), Maruti Suzuki, the industry association strongly feels that all three segments in the auto industry - OEMs, suppliers and service providers - will be hiring in a big way in the next few years.

Prince Augustin, executive vice-president, Human Capital, Mahindra & Mahindra, said, industry leaders were taking various initiatives to vitalise the shop floor in manufacturing companies.Top companies were looking at increased capital expenses and improved training modules for shop floor employees.

He pointed out that after the meltdown in international automobile markets and the relative stability in the Indian markets, some engineers of Indian origin, who were working for US car-makers, had returned to India. They bring in a wealth of knowledge and experience.

According to Dilip Chenoy, director-general of SIAM, many automobile manufacturers are on the speedy road to expansion now. Rural prosperity and improved infrastructure are major factors, which have resulted in the growth of the auto industry. While these factors are creating opportunities for companies to reinvent themselves in form and spirit, employees remain a critical factor in making this happen in actuality.

N N Akhouri, senior vice-president - HR, Hero Honda, said, SIAM was trying to increase the employability of people - currently at a low of 25-30 per cent as against 50 per cent in developed nations - by adopting government-run ITIs. As of date, SIAM has partnered with 78 of these institutes, it aims to add 22 more to bring in a total of 100 ITIs in its care.

BRIEFLY

FII net sellers
New Delhi: After being net investors for the first two weeks of this year, foreign funds have turned net sellers by pulling out a net Rs 1,648 crore from the domestic stock markets last week. Foreign institutional investors (FIIs) were net sellers of shares worth Rs 1,648.5 crore during the week ended Friday, as per the data available with Sebi. — PTI

Camlin net up
Mumbai: Camlin Fine Chemicals has registered a 28.3 per cent jump in gross sales/income from operations at Rs 89.92 crore during the nine-months period ended December as against Rs 70.11 crore during the corresponding period last year. The net profit stood at Rs 3.15 crore during the nine-months period compared to Rs 2.56 crore in the same period last year. — PTI

Aqua Logistics
New Delhi: The initial public offer of supply chain firm Aqua Logistics, which aims to garner up to Rs 150 crore through the issue, will open for subscription from tomorrow. The Mumbai-based company has fixed the price-band of initial public offer between Rs 220-230 per share. The issue closes on January 28. — PTI