Date:30/12/2005 URL: http://www.thehindubusinessline.com/2005/12/30/stories/2005123002880600.htm

Back IMD redemption process smooth; cheques dispatched

Our Bureau

Mumbai , Dec. 29

THE redemptions for the $5.5-billion India Millennium Deposits went off according to schedule, said officials from State Bank of India. "The cheques have been dispatched and they will be presented to our New York, London or Frankfurt branches, depending on the currencies. Once the cheques are presented, the depositors will get their money," said the official.

Around Rs 600 crore of the IMD redemptions would be paid in India in rupee, to the families of depositors in case of death, the official said.

The Reserve Bank of India on Thursday completed the sale of foreign exchange to SBI towards redemption of IMDs. A total amount equivalent to $7,079.62 million was sold out of RBI's foreign exchange reserves. This will be reflected in the level of foreign exchange reserves as on December 30, 2005.

On Thursday, the RBI lent Rs 30,110 crore to banks through the Liquidity Adjustment Facility. The IMD redemptions had put pressure on liquidity over the last few days with RBI infusing huge amounts through repo auction.

Call rates touched 7.25 per cent in the early session and remained above seven per cent in the second half as well. It closed around 7.10 per cent (6.90 per cent). But the IMD did not have any negative impact either on the rupee or bond prices.