Inflation dips a bit, touches 11.89 per cent

New Delhi, July 24: Inflation rate dipped to 11.89-per cent for the week ended July 12. The inflation has softened somewhat with prices of many essential items either declining or remaining static.

The figure for the week ended July 12 is quite in line with the rate of inflation for the week ended July 5, that stood at 11.91 per cent, very marginally higher than the rate of 11.89 per cent reported a fortnight ago.

With early signs of stabilization in tandem with the marginal rationalization in the oil prices and the rupee bounce, it is expected that the Reserve Bank of India may choose to maintain status quo in the forthcoming credit policy on July 29.

The industry feels that RBI may choose to increase the Repo Rate by 25 basis points as oppose to an increase of 50 basis points that was being anticipated a couple of weeks earlier.

Last month, the RBI had raised short-term lending rates for banks – repo rate -- by 0.75 per cent in two instalments, while also increasing mandatory cash deposits of banks by 0.50 per cent in two phases to suck out excess liquidity.

The annual inflation has declined to 9.92 per cent in the primary articles group during the week ended July 5 compared to 10.84 per cent reported a week earlier. (ANI)

State Bank of Saurashtra and State Bank of India to merge

New Delhi, July 24: The Union Cabinet today gave its approval to the merger of the State Bank of Saurashtra with the State Bank of India to enable it to up-scale in terms of footprint, manpower and other resources.

The merger would also enable it to face competition arising from globalization of the economy, apart from augmenting efficiency and enabling better management of risk.

For the merger, the Union Cabinet today gave its approval to the following proposals:

i) to issue an order sanctioning the Scheme of Acquisition of State Bank of Saurashtra by the State Bank of India, in terms of section 35(2) of the State Bank of India Act, 1955

ii) to introduce Bill (a) repealing the State Bank of Saurashtra Act, 1950 in the Parliament, (b) to make consequential amendments in the State Bank of India (Subsidiary Banks) Act, 1959 to remove references to State Bank of Saurashtra wherever it occurs in the State Bank of India (Subsidiary) Banks Act, 1959.

The Bill would be called namely State Bank of India (Subsidiary Banks) Amendment Bill, 2008. (ANI)