Mumbai, May 2
The Reserve Bank of India on Thursday warned of "very limited" space for further easing of monetary policy, striking a hawkish tone a day before it is widely expected to cut interest rates by 25 basis points for the third time this year.

The cautious language in its report on macroeconomic and monetary developments could dent rising market hopes for a dovish stance from RBI governor Duvvuri Subbarao on Friday and further easing this year.

The RBI's warning comes amidst hope by banks and industry that interest rates would be reduced by at least 25 basis points in addition to a reduction in CRR. "In view of macro-financial risks that stay significant, headline inflation remaining above the threshold and consumer price inflation remaining high, the space for action for 2013-14 remains very limited," the RBI said.

The RBI is expected to cut the policy repo rate by 25 basis points to 7.25% on Friday amid easing headline inflation and an economy growing at its slowest in a decade. However, the outlook for further cuts is tempered by a high current account deficit and still-high inflation.

The RBI's survey of professional forecasters lowered its growth forecast for FY2013-14 to 6% from 6.5% in its previous survey. Asia's third-largest economy is expected to have grown at about 5% in the fiscal year that ended in March. The survey projects wholesale price index inflation at 6.5% during the current fiscal year, lower than the 7% forecast in its last survey. 

The BSE Sensex rose on Thursday to mark its highest close since early February, as interest rate-sensitive stocks such as HDFC gained on hopes that the RBI will cut interest rates on Friday while TCS rose on value buying. The 30-scrip index rose 1.19%, or 231.59 points, to end at 19,735.77, marking its highest close since Feb 4. The NSE Nifty rose 1.17%, or 69.15 points, to end at 5,999.35, marking its third session of gains, after touching the psychologically important 6,000 level earlier in the day. The Sensex continues to build on gains of 3.6% in April, buoyed by strong foreign investor inflows, as the recent slump in commodity prices is seen helping bridge India's current account deficit. India's factories lost momentum in April as output grew at its weakest pace in over four years, but a jump in export orders augured well for the coming months, a survey showed on Thursday. The RBI may sweeten its expected 25 basis point interest rate cut with a similar reduction in CRR to ease tight market liquidity conditions as increasingly benign inflation gives it room to manoeuvre.

Bratislava, Slovakia, May 2
The European Central Bank cut interest rates for the first time in 10 months on Thursday, promising to provide as much liquidity as euro zone banks need well into next year and to help smaller companies get access to credit.

The ECB lowered its main interest rate by a quarter percentage point to a record low 0.50% in response to a drop in eurozone inflation well below its target level, and rising unemployment. The cut was widely expected after President Mario Draghi said last month that the ECB stood ready to act — a phrase he repeated on Thursday — but few economists expect it to make a decisive difference.

Acknowledging that, the ECB said it would prime banks with as much liquidity as they need until at least July 2014 and look at ways to boost lending to smaller companies, which are the lifeblood of Europe's economies but which in many countries have been starved of credit.

"Weak economic sentiment has extended into the spring of this year," Draghi told a news conference. "Our monetary policy stance will remain accommodative for as long as needed." He stuck with the ECB's forecast that economic recovery will take hold later in the year but highlighted "downside risks" to that position.

The ECB would "monitor very closely" all incoming evidence, Draghi said, a phrase which in the past has suggested further policy action to come. He added that there was a strong consensus to cut rates, indicating one or more policymakers did not agree.

Unemployment hit a record high in March and annual inflation plunged to 1.2% in April, pressuring the ECB to cut rates to honour its mandate to deliver price stability, which it defines as inflation close to, but below 2%. — Reuters

New Delhi, May 2
With Rs 113 crore, Reliance Industries Ltd tops the list of companies that have unpaid and/or unclaimed dividends lying with them, Parliament was informed on Thursday.

Dividend payments of a little over Rs 1,101 crore are lying unclaimed with 1,406 companies, Corporate Affairs Minister Sachin Pilot said in a written reply to Lok Sabha.

Payments are required to be made to investors within 30 days of the dividend being declared. Any unpaid or unclaimed amount needs to be transferred to an 'unclaimed dividend account' within the next seven days.

Money lying unclaimed in this account for seven years gets transferred to the Investor Education and Protection Fund (IEPF).

Subsequently, no such claims are entertained against the company or the IEPF for any money transferred to the fund in accordance with the relevant provisions.

"An amount of Rs 1,101.35 crore is presently available with 1,406 companies on account of unpaid and unclaimed dividends," Pilot said citing data available with 'MCA 21' portal.

Individually, energy giant Reliance Industries has total unclaimed/unpaid dividends worth Rs 113 crore, followed by FMCG major ITC (Rs 74.34) crore, Hindustan Unilever (Rs 49.05 crore), Hero MotoCorp (Rs 40.22 cr) and Tata Steel (Rs 38.53 cr).

Besides, other companies having sizable money lying with them in form unclaimed dividends include Lakshmi Vilas Bank (Rs 34.14 crore), ICICI Bank (Rs 19.17 crore), Larsen & Toubro (Rs 18.69 crore), MRPL (Rs 14.23 crore) and IDBI Bank (Rs 13.59 cr).

The companies declare annual dividends at their annual general meetings and are required to pay the same to the investors within 30 days thereafter. — PTI

GenevaNew Delhi, May 2
India is considering emergency tariffs on some iron and steel pipes, tubes and profiles to protect its domestic industry from imports, primarily from China and Italy, New Delhi said in a World Trade Organization filing seen by Reuters.

Jindal Saw Ltd and Indian Seamless Metal Tubes Ltd, which account for more than half of India's production of seamless pipes and tubes, asked the government to impose tariffs after their profits fell by more than three-quarters from 2011-2012, according to details of the case published by India's Customs & Central Excise office.

WTO member countries are allowed to use temporary tariffs if they can show there is a real threat of damage to the domestic industry from a surge of imports, although such claims can be challenged by other countries.

Imports of the products have arrived in India at an annualized rate of 373,777 tonnes in 2012-2013, the filing said. Although that was 12.1% less than in 2011-2012, domestic production has still suffered a decline of 18.2% to an annnualized rate of 261,003 tonnes in 2012-2013.

India currently uses little more than a third of its annual production capacity of 685,000 tonnes. — Reuters

WTO members are obliged to tell the WTO if they are investigating the possibility of tariffs to safeguard an industry, which does not necessarily mean they will go ahead. India invited interested parties to respond within 30 days.