Banks to cut Interest Rates

• We could see a drop in cost of funds up to 75 basis points, as leading state-owned banks get ready to lower lending rates under pressure from the government
• A string of public sector banks — the State Bank of India, Bank of Baroda, Indian Bank and Central Bank of India — confirmed on Tuesday that they were considering rate cuts following last week’s move by the Reserve Bank of India (RBI) to slash reserve ratios and cut short-term rates and the government’s assurance of favorable policy measures
• The finance minister P Chidambaram said the government had asked the banks to submit a fortnightly report on sectoral credit growth to the finance ministry, which would review the liquidity situation on a daily basis
• Finance secretary Arun Ramanathan, the ministry’s top bureaucrat, is likely to meet leading private sector bankers on Wednesday to assess their financial positions
• Look at this graphic

Barak Obama takes early lead in USA presidential race

• Initial polls with the charismatic Illinois senator widely expected to defeat the Vietnam war veteran to become the first black American to occupy the White House
• Also Higher turnout suggests to a strong Democratic showing, more so this time because the Democrats have been more active in registering new voters and bringing or wringing—out the vote
• Some interesting statistics. Contributions received by Obama as of Oct 15 is $641.5m compared to McCain’s $358m
• Spending for Obama is $564m compared to McCain’s $262m

3G auction on track despite global gloom

• The government on Tuesday decided that the auction of third-generation (3G) frequency that allows video conferencing, high-speed internet, faster download on mobile phones, would be held as scheduled on January 2009 despite the global financial meltdown
• In a meeting, Prime Minister, finance minister and communications minister A Raja agreed to increase spectrum user charges for all existing telecom operators — both using CDMA and GSM technologies and impose a one-time fee on GSM operators who hold second-generation (2G) radio frequencies beyond the 6.2 MHz mark
• At present, all telecom services in the country are offered on second-generation (2G) radio frequencies and service providers pay between 2-6% of their annual gross revenue (AGR) to the government as spectrum user charges
• It was also decided that the stake sales by Swan and Unitech to UAE’s Etisalat and Norway’s Telenor, respectively, would not be probed

Kingfisher Airlines defaults on lease rentals for 4 jets

• Liquor baron Vijay Mallya’s Kingfisher Airlines has defaulted on payment of lease rentals to GE Commercial Aviation Services (GECAS) for four A320s, according to a complaint filed by the US company with India’s aviation regulator
• Upset at the default, GECAS, one of the world’s top aircraft lessors, has asked the Directorate General for Civil Aviation (DGCA) for permission to repossess the aircraft and has demanded that the aircraft be deregistered from the airline
• However, Kingfisher denies any default and has obtained a stay order from the Karnataka HC to prevent the repossession
• The tussle with GECAS is the latest instance of the cash crunch being faced by Kingfisher. Kingfisher’s travails are a reflection of the tough times being faced by India’s aviation sector
• Kingfisher Airlines posted a net loss of Rs 483.2 crore for the quarter ended September 30, 2008, almost double its net loss of Rs 253.1 crore in the same period a year earlier

Fuel Price cut on the cards

• The government is looking at cutting petrol prices by up to Rs 2 a litre
• The countdown for a cut in prices has begun with the average price of India’s crude oil basket easing below the $60/ barrel mark on Tuesday which is near the magic figure (the break-even price) of $59/barrel announced by petroleum minister Murli Deora in Parliament

Limits of international summits

• An excellent editorial by my favorite write Swaminathan Aiyar on limitation of international summits in solving global financial crises. Here’s the link