Infra debt funds set to get tax sops

The proposed debt funds for infrastructure would be in the form of venture capital (VC) or private equity (PE) funds and would qualify for special tax incentives. These funds, to which foreign investors are expected to subscribe to, would also be given exemptions from Sebi regulations for foreign VC funds and also the RBI rules on external commercial borrowings (ECBs), official sources said. When contacted, department of economic affairs secretary, R Gopalan, said the detailed criteria for these funds, which are expected to play a major role in...

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Oriental Bank raises FD rates on two maturities

PSU lender Oriental Bank of Commerce (OBC) raised fixed deposit rates up to 50 basis points on two select maturities. Fixed deposit rates for maturity between one year to 499 days and that of 501 days to two years have been raised from 8.50 per cent to 9 per cent. The 9 per cent interest rate will be applicable to both, term deposits of less than Rs. 15 lakh and that between Rs. 15 lakh to Rs. 1 crore, OBC said in a statement. However, the rates on term deposits above Rs. 1 crore for the same period have been kept same, it added. The new rates...

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Canara Bank raises $350 mn via bonds

Public-sector lender Canara Bank said it has raised USD 350 million (about Rs. 1,575 crore) through issuance of bonds. "The Bank has raised USD 350 million through issue of senior unsecured bonds under medium-term note (MTN) programme through its London Branch," Canara Bank said in a filing to the Bombay Stock Exchange (BSE). The interest rate for the bond is 5.125 per cent per annum and is for a period of 5.5 years, it said. It further said the bonds are listed on the Singapore Stock Exchange. Shares of Canara Bank ended at Rs. 610.30 on the BSE,...

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Indian Bank to add 100 branches, come with IPO

Press Trust of India / Kochi March 4, 2011, 17:56 IST Public-sector lender Indian Bank today said it aims to expand its branch strength by adding 100 branches across the country by next financial year. Of this 25-30 branches would be in Kerala, bank's Executive Director Rajeev Rishi told reporters here. Currently, Indian Bank has over 1,800 branches in India and three overseas -- Singapore, Colombo and Jaffna. Within the three years, it plans to increase its branch strength to 2,500, total employees to 25,000, business to Rs 5 lakh crore and net...

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Banks' borrowing from RBI to soar in mid-March

Reuters / Mumbai March 04, 2011, 16:37 IST Banks' woes over tight liquidity conditions will mount in the middle of March during advance tax outflows, which could push up the call rate and also borrowing from the central bank's daily repo window. Dealers expect banks to borrow more than Rs 1.25 lakh crore a day from the central bank compared with an average daily borrowing of Rs 74,000 crore daily so far this month. "Borrowing from the Reserve Bank of India (RBI) could touch a peak of Rs 1.5 lakh crore during mid-March and the inter-bank cash rate...

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'Progress on banks' compensation, more needed'

Reuters / New Delhi March 4, 2011, 11:45 IST Progress has been made on setting policies for compensation in the financial industry but more needs to be done, Deutsche Bank Chief Executive Josef Ackermann, who chairs an industry trade group, said on Friday. Ackermann also said more "consistency and clarity" is needed in implementing regulatory proposals for the financial industry, which faces tighter capital controls and other rules in the wake of the financial crisis. The Deutsche Bank chief also said that the United States economic recovery "appears...

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Returns on Ulip pension plans to rise to 6% in FY12

MUMBAI: Returns on Unit-linked pension products are set to rise to 6% next fiscal after the central bank raised benchmark policy rates in 2010-11 to combat inflation. The Insurance Regulatory and Development Authority , or Irda, the insurance watchdog had benchmarked that returns on these products should be 0.5%, or 50 basis points, over the reverse repo rate, the rate at which the Reserve Bank of India absorbs funds from banks. The re-verse repo rate is now 5.75% after a series of rate increases. The Irda had mandated a 4.5% return on unit-linked...

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Bangladesh govt tells Yunus to quit as Grameen Bank MD

Bangladesh’s government ordered Nobel laureate Muhammad Yunus from his post as head of his microfinance bank on Wednesday — a humiliating blow for an activist whose revolutionary idea of giving out small loans lifted many out of poverty. But the Grameen Bank said he remained in charge and that it would fight the decision.The demand for Yunus’ removal as Grameen’s managing director capped a string of problems that faced the outspoken government critic, including an apparently politically motivated defamation trial and accusations of an unauthorised...

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Higher capital to help Nabard access financial market better

Sanjay Jog The state-run National Bank for Agriculture & Rural Development (Nabard), which is currently undergoing a repositioning exercise, has received a major boost following a slew of proposals by the finance minister (FM) in the Union Budget 2011-12. The FM has increased allocation to Rs 10,000 crore from Rs 5,000 crore for supporting crop loan refinance to cooperatives and regional rural banks (RRBs), and increasing Nabard’s capital base. Besides, a dedicated fund of Rs 2,000 crore has been set up in Nabard for the creation of warehousing facilities. The proposals come at a time when Nabard will soon launch direct risk-based lending to two cooperative banks, provide long-term financing...

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Fin inclusion plan to be a criteria for new bank licences: RBI

The Reserve Bank of India (RBI) Governor D Subbarao today said the central bank will look at business plan for financial inclusion, in addition to other things, before granting banking licence under the new policy. "One of the criteria for evaluating application (for new bank licence) that we will get in due course of time, will indeed be their business plan for financial inclusion," Subbarao said at an IIF event here. The RBI is scheduled to announce the guidelines for grant of new bank licences by month-end.The central bank, in August 2010, brought...

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ICICI Bank expects over 20 pc credit growth in 2011-12

NEW DELHI: Country's largest private sector lender ICICI Bank today said it expects over 20 per cent growth in loans in the next fiscal against 18 per cent in 2010-11. "...it (credit growth) would be upward of 20 per cent," ICICI Bank Managing Director Chanda Kochhar told reporters on the sidelines of an interactive session organised by industry body CII here. She also said that the overall credit offtake in the country is likely to be over 20 per cent in the next financial year. "We are seeing a strong credit growth which is universal across...

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RBI reminder to banks: increase deposit rates, cut lending rates

The Reserve Bank on day again prodded banks to raise deposit rates to encourage people to save more and put the Indian economy on sustained double-digit growth and lower lending rates by cutting on salaries, wages and transactions costs. At a meeting of the Institute of International Finance (IIF), a global association of financial institutions, RBI Governor D Subbarao also said that the central bank will come out with its views on the Malegam Committee report on micro financial institutions (MFIs) that favours a 24 per cent cap on interest rates...

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PNB shortlists 10 firms for life insurance JV

State-owned Punjab National Bank (PNB) today said it proposes to buy stake in an existing life insurance company and has shortlisted 10 companies, including Reliance Life and Bharti AXA, for the strategic partnership. The bank had invited expression of interest from intending insurance companies for strategic partnership in insurance business with the bank in December last year. PNB said it has decided to participate in the life insurance venture through "a corporate agency tie-up along with equity participation in an existing Indian life insurance...

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Interest rates have peaked or near peak: OP Bhatt

MUMBAI: Interest rates in India have peaked or are near a peak, O.P. Bhatt, chairman of State Bank of India , the country's largest lender said on Thursday. The central bank has raised rates seven times in the past 12 months but headline inflation has remained high partly due to high food prices caused by a sudden shortage of fruits and vegetables. The Reserve Bank of India is widely expected to raise rates by 25 basis points at its policy review on March 17 Source: EconomicTi...

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Bank licence seekers must commit to govt's financial inclusion agenda: Subbarao

NEW DELHI: Prospective bank licence seekers, be it industrial houses or finance companies, will have to prove their commitment to the government’s social agenda of ‘financial inclusion’ if they are to stand any chance of getting one, Reserve Bank of India Governor Duvvuri Subbarao said. Foreign banks that want to expand in India may have to mandatory set up subsidiaries if they are serious about reaping the fruits of Indian growth, although the new rules are yet to be finalised, Subbarao signalled. The central bank, which will be issuing...

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Banks can meet Basel III standards: RBI

Reuters / New Delhi March 3, 2011, 17:00 IST Indian banks overall have sufficient capital to meet the new Basel III standard but a few may need to augment their capital to get there, Reserve Bank of India Governor Duvvuri Subbarao said on Thursday. "Indian banks meet Basel III standard for capital, that is at the aggregate level. It is quite possible that a few individual banks may have to augment capital," he said at a conference. According to Basel III norms, banks must shore up their capital adequacy ratios and maintain top quality capital at 7% of risk-weighted assets. Top quality capital includes equity capital.Though Indian banks have much higher capital adequacy ratios than the minimum...

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Govt okays Banking Laws Amendment Bill

Press Trust of India / New Delhi March 3, 2011, 15:38 IST The government today gave green signal to the Banking Laws Amendment Bill that seeks to align the voting rights in banks in proportion with the equity holding. Currently, the voting rights of a shareholder is limited to 1% in state-owned banks and 10% in private banks irrespective of the equity holding. The Amendment Bill, which was cleared by the Union Cabinet, will now be tabled in Parliament for approval, sources said.The amendments, once approved by Parliament, will enhance the voting...

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