The document provides news updates in the banking sector. It summarizes that the EPFO declared a higher provident fund rate of 9.5% for 2010-2011 after discovering a hidden surplus. It also discusses the WPI shifting to a new base year and product coverage. Additionally, it mentions the State Bank of India discussing forming a holding company to control its equity and subsidiaries more efficiently. Some banks have re-introduced special deposit schemes with slightly higher interest rates. The RBI is also likely to hike key policy rates in its mid-quarter monetary policy review. Finally, the government increased the DA for central government staff and pensioners by 10%.

1. NEWS UPDATES IN BANKING SECTOR SUBMITTED BY- NavdeepKaur

2. EPFO to pay out 9.5% for FY11 on ‘hidden surplus’ Labour Minister MallikarjunKharge declared a higher provident fund rate at 9.5% for 2010-2011. The EPF(Employee Provident Fund) has been 8.5% since 2005-06. The higher return for subscribers became possible as the EPFO discovered a hidden surplus of Rs 158 crore after auditing the interest suspense account since its inception in 1952.

3. MOVED INDEX The wholesale price index(WPI) ,the most widely watched measure of inflation, has shifted to a new base,2004-05 and much bigger footprint in terms of product covered and price sample. Larger 676 items against 435 in the 1993-94 series. 62% of the index are new items. The index will have 5842 quotation against 1918 earlier. Scientific product groupings with possibility of substitution of sub products. An updated product basket that is in sync with consumption pattern today. The weight assigned to reflect the changing consumer preferences and lifestyles.

4. State Bank mulls holding co for bank and arms India’s largest lender, State Bank of India , talk with the banking regulator, Reserve Bank of India, to form a holding company which will control the equity of the bank , its associates and also subsidiaries. To move which could lead to a more efficient use of capital. The SBI group which controls close to one –fourth of the country’s market for loans and deposits . This would call for changes in the SBI Act. Bank has assets of over Rs 10,00,000 crore and a wide network of over 14,000 branches.

5. Special deposit schemes return with high interest 14 banks have re-introduced special liability products to lure small savers. Facing a poor 14.4% deposits growth. Such deposits come with a special terms like 390 days,790daysor 1000 days and carry a slightly higher interest rates compared to the interest rates attached on regular deposits on either side of the special term.

6. RBI may tighten interest rates in policy review The Reserve Bank India is likely to hike key policy rates in mid- quarter review of the monetary policy. Central Bank will raise repo rate by 25 BPS Central Bank will raise reveres repo rates by 50 BPS.

7. DA for Central Government staff up 10% The government has given a booster shot to the economy in the form of a 10% salary increase for 88 lakh central government employees and pensioners. The increase , effective july 1, from 35% to 45% of the basic salary. The government will pay Rs9,303 crore extra every year to central government employees.

8. Thank you