Banks asked to fund margin requirements: FINMIN

New Delhi, May 22 (UNI) In an attempt to stem the rapid slide in the stock markets, a top official of the Finance Ministry today said Banks have been advised to provide ample liquidity to those who require money to meet margin requirements in the stock markets.

"It appears that some brokers trading on the proprietary account may have come under margin pressure and therefore may have sold.

The RBI has made it clear that Banks have been advised to provide ample liquidity to those who may require money to meet margin requirements. Banks are doing so. That position stands and will continue to do so,'' Mr Jha said, The official noted that trading at the BSE and NSE was suspended for an hour beginning 1156 hrs and ending 1256 hrs. Trading has since resumed, he said.

Mr Jha noted that Sensex closed at 12,217 on Wednesday, May 17,2006. Since then, there has been volatility in the market and attributed this to a number of factors. These include decline in global markets, the Southward movement of metal prices, the hardening of interest rates and the compartive attractiveness of other emerging stock markets.

The official spoke about the sound fundamentals of the Indian economy and reiterated that "the Indian growth story remains a vibrant growth story." The GDP growth rate in 2005-06 is estimated at 8.1 per cnt and the growth story is expected to continue this fiscal too. The foreign exchange reserves are 163 billion dollars, inflation stands contained at 4 per cent manufacturing growth is 9.1 per cent.

He said CII's Business Confidence Index for April- September 2006 stands at 69.3 , which is an increase of 2.1 per cent compared to the previous period.

The CEOs of 58 companies, in a survey carried out by Business Standard, have given 6.46 out of 10 marks for financial management, Corporate profits also continue to be buoyant, Mr Jha added.

UNI