INCREASE IN CRR

CRR stands for cash reserve ratio. Its a specific amount of deposit that banks have to maintain with Reserve Bank of India. An increase in CRR means banks will have to keep more proportion of lending in the form of deposit which is an opportunity loss for them and thereby decrease in earnings.Banks on their part will have to pay more to depositors to attract them to keep their funds with banks.It will push up the cost of funds for banks and to meet this increased cost and margin pressure ,the banks will have to raise the lending rate.

An increased lending rate will mean an increased cost of capital for the corporate sector.This will lead to contraction in activities and a lower demand in various sectors. For instance: the main reason for skyrocketing real estate prices is availability of easy and cheap funds from banks.But if the bank faces fund crunch , they will first cut back on loans to risky sector like real estate.It will dampen demand to a certain extent.

Some banks on the other hand might face the risk of defaulting in compliance to higher CRR rate. An increased lending rate will hurt the borrowers and hence an accumulation of non permorming loans.

To combat the situation the banks might enter into bilateral deals and ask corporate borrowers to seek refinance from other banks. Another option is to raise funds through External Commercial Borrowings (ECB).

RISING RUPEE

Rupee has been touching its peak against dollar since the last few months. Boosted by high interest rate and caused by the tightening of the money market, its posing a threat to the very existence of small exporters. Some of the exporters have started postponing their receivables and are choosing to park funds in the Exchange Earners Foreign Currency(EEFC) accounts. They will convert those funds into rupee once the rupee will stabilise.

Banks too have become cautious while lending to small and mid sized enterprises (SMEs) in export oriented sectors because the result could be an accumulation of non performing assets as they don't use much of hedging instruments.

Exporters on the other hand are seeking concessions in the form of subsidies from the central govt. Few SMEs are trying to renegotiate contracts with buyers in the overseas market.Some large corporates have cut down their export operations and instead are diverting their focus on the domestic market or cutting the production itself.

Stronger rupee has only benefitted the foreign institutional investor.

ACE ACID

Folic Acid is vital in the metabolism of fatty acids in the brain.It helps control genetic disorder.Pregnant women should take a note that deficiency of Folic Acid can increase the risk of neutral defects in newborns. Fruits like bananas,oranges,lemons,strawberries and cantaloupes are a good source.

HEALTH

Don't overcook the Food

If the food is cooked on low flame for long time, most of it's vital nutrients ( including phytonutrients) are lost. Its advisable to steam, boil or microwave the food to retain its nutrients. Remember, more the cooked food resembles its ingredients , most nutritious it is.

Quotable Quotes

Everything is funny as long as it is happening to somebody else.

Only a life lived for others is worth living.

Lack of willpower has caused more failure than lack of intelligence or ability.

Whoever does not try does not learn.

Happiness often sneaks in through a door you don't know you left open.

One today is worth two tommorrows.

That man is richest whose pleasures are cheapest.

The shell must break before the bird can fly.

The most important thing a father can do for his children is to love their mother.

Our greatest glory consists not in never falling , but in rising everytime we fall.

Weakness of Attitude becomes weakness of Character.

Three things in life are most valuable: Love , Selfconfidence and Friend.

He who falls in love with himself will have no rivals.

Motivation is what gets you started. Habit is what keeps you going.

Recognition is the greatest motivator.

Three things in life once gone can never come back are: Words, Opportunity and Time.

Enjoy Life. There's plenty of time to be dead.