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SBI treasury, forex units mergeMUMBAI -- Drqwing curtains to the three year-old controversy, the State Bank of India has merged its treasury...

SBI treasury, forex units merge

MUMBAI — Drqwing curtains to the three year-old controversy, the State Bank of India has merged its treasury division – dealing in the call and gilts market – with the foreign exchange cell. The integrated treasury is reporting to the bank’s chief financial officer (CFO) P K Bhattacharjee.

State Bank chairman MS Verma has confirmed the development. "There is no alternative but to go for integrated treasury operations. We have merged all treasury operations and are in the process of setting up a unified dealing room," a senior State Bank executive said. The bank has been able to successfully combat the recent liquidity crisis by virtue of the integrated treasury.

Deposit rates down

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MUMBAI: Bank of America (BankAm) and the Bank of Nova Scotia on Wednesday slashed their short-term deposit rates by a whopping 300-350 basis points. signalling a return of liquidity into the system. This is the first round of a downward revision of deposit rates by thebanks.

The short-term rates were jacked up last month after the Reserve Bank of India’s (RBI’s) announcement of a series of measures, which sucked out liquidity from the system. The RBI’s objective was to harden domestic interest rates to curb speculation in the foreign-exchange market."The industry will now witness a fierce deposit-rate war. Some of the banks, particularly the foreign banks, will be forced to pare their deposit rates to protect their spreads," said a senior banker.