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Raising funds through ECB route may slow down |
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Indian corporates’ appetite for raising funds through the external commercial borrowing route may lessen this year, as the interest rate differential between overseas and domestic interest rates has reduced considerably, said Mr Vishwavir Ahuja, Bank of America Managing Director and CEO for India.
Explaining the reasons for ECBs becoming less attractive Mr Ahuja said it was due to the spreads widening dramatically, currency factor and high cost of transaction. Also, for large ticket transactions there is a credit squeeze in the international market, he added. “There has been a shift in some sense from raising money in ECB to domestic market,” he said.
Announcing Bank of America’s profits from Indian operations for the fiscal 2007-08, he said that the focused strategy the bank followed in India of doing mainly cross border transactions and offering sophisticated and customised products helped improve revenues.
For the year 2007-08, the net profit from Bank of America’s Indian operations was at Rs 305 crore, against Rs 195 crore last year, a rise of 56 per cent. Total revenue increased to 862 crore (Rs 663 crore). Net interest income increased to Rs 350 crore (Rs 261 crore) and non-interest income increased to Rs 348 crore (Rs 233 crore).
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