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Saturday, March 12, 2011

IT can play a role in financial inclusion: Azim Premji

THRISSUR: Wipro Chairman and Managing Director Azim Premji said information technology can help increase reach of financial services to the poor in rural areas.

Besides bracing up to face the stiff competition, Indian banking system should be ready to shoulder new responsibilities like financial inclusion and penetration into the rural sector to serve the less privileged, Premji said while inaugurating renovated corporate office of South Indian Bank here.

Financial inclusion in India at present compared poorly with its peers in Asia. Rural penetration can be increased only by increased use of information technology, he said.

To bring disadvantaged and low income segments of society under the banking net, the government has advised banks to provide financial services at affordable costs to habitations having a population of over 2000 by March, 2012.

Premji also noted that the global economic crisis was largely the result of indiscipline in US and European banking systems. But it did not affect the Indian banking system mainly due to effective steps by RBI and also self-discipline of banks.

M Damodaran, former Chairman of SEBI and who now heads the Customer Service Committee appointed by RBI, in his keynote address said 'solidity' and not being 'spectacular' should be our aim.

"Be sound, be safe", should be our slogan, he said. He also said it was important for banks to deploy financial services through customer-centric technology and delivery channels to serve customers better. Banks should also equip their customers to use technology so that they would benefit from Information Technology applied in banking services.

Source: EconomicTimes
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Friday, March 11, 2011

Government bond falls on selling pressure

The government bond prices declined due to fresh selling pressure from banks and corporates, while call rates finished higher at 7.00 per cent at the overnight call money market here today, owing to good demand from borrowing banks.
The 8.08 per cent government security maturing in 2022 declined to Rs 100.00 from of 100.17, while its yield moved up to 8.08 per cent from 8.06 per cent.

The 8.13 per cent government security maturing in 2022 dropped to Rs 100.49 from Rs 100.71, while its yield rose to 8.06 per cent from 8.03 per cent.

The 8.26 per cent government security maturing in 2027 eased to Rs 98.65 from Rs 98.70, while its yield ruled steady 8.41 per cent.

The 7.99 per cent government security maturing in 2017, the 7.49 per cent government security maturing in 2017 and the 7.80 per cent government security maturing in 2020 were also quoted lower at Rs 99.97, Rs 97.60 and Rs 99.13, respectively.

The call money rate ended higher at 7.00 per cent from overnight closing level of 6.80 per cent. It moved in a range of 7.00 per cent and 6.95 per cent.

The Reserve Bank of India (RBI) under the Liquidity Adjustment Facility purchased securities worth Rs 31,835 crore from 27 bids at the three-days repo auction at a fixed rate of 6.50 per cent.

Source: Financial Express
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Thursday, March 10, 2011

Tata Motors Nano could enter Europe in 2-3 yrs-CEO

FRANKFURT: India's Tata Motors could bring its small car Nano, touted as the world's cheapest car, to the European market as early as 2013, although a final decision has not been made, its chief executive told a paper. Asked whether the Nano would be made available in Europe, Carl-Peter Forster told German newspaper Frankfurter Rundschau in an interview published on Saturday: "We don't know yet. But it will certainly take two to three years."

Sales of the Nano -- costing slightly more than $2,000 apiece -- doubled in February to 8,262 units.

Tata Motors, part of India's salt-to-software Tata conglomerate whose range includes utility vehicles, cars and the ultra-cheap Nano, posted December-quarter net profit of 24.24 billion rupees ($857 million), compared with 6.5 billion a year earlier.

Source: EconomicTimes
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Wednesday, March 9, 2011

Bank of Baroda chief M D Mallya is BS Banker of the Year

Mangalore Devdas Mallya, the chairman & managing director of Bank of Baroda, is the Business Standard Banker of the Year for 2010. Mallya was chosen by a five-member jury headed by Securities & Exchange Board of India’s former chairman, M Damodaran, for BoB’s sterling performance over the last couple of years. The jury had shortlisted three bankers from 30 on performance parameters ranging from growth in deposits, advances, assets and bad debt to return on assets and business per employee.

Mallya took charge of BoB in 2008 at a time when global turbulence in the financial sector had threatened to shake India’s banking foundation. Mallya’s mandate was to take BoB to a new level and attract the young. Not only did the person with an “ice temperament” — as colleagues describe him — steer the bank out of the storm, he brought about good growth numbers and a better-than-counterparts showing. BoB’s profits grew 55 per cent in 2008-09 and 37 per cent in 2009-10. Return on assets improved to 1.21 per cent this financial year from 1.1 per cent last year, while return on equity increased to 22.19 per cent from 19.48 per cent.

At the peak of the crisis, the bank contained its incremental delinquency ratio at 1.13 per cent (for 2009-10), with a provision coverage ratio of 74.9 per cent as on March 31, 2010. Investors took note and the stock price outperformed the sector, fetching a return of over 172 per cent.
For Mallya, “cautious aggression” and “stable growth with quality” were key words that helped him steer a steady course through the mayhem. In an interview with Business Standard — the details of which are published in the Banking Annual distributed with today’s edition — when Mallya was asked if BoB’s risk appetite was less than its strength, the CMD said: “…look at our growth of 28 per cent (credit). Where is the conservative approach in that? We are aggressive, but cautious.” So, Mallya played with a straight bat, unlike those playing to the gallery with flamboyance, and it paid off.

The Banking Annual also deals with two key areas in the sector. Both are as pertinent to the reader as the country’s economic pace to the global financial health. One is about Reserve Bank of India’s dilemma in allowing industry to open banks, which is the cover story; and second on how clean the books of banks are.

But what was a nightmare for bankers is history now. Days of cautious hope are back. The managing director & chief executive of India’s largest private sector bank ICICI Bank, Chanda Kochhar, in an interview to Business Standard’s Banking Annual, said: “Sustainable, profitable growth is back.”

When the global economy is bouncing back and India, in particular, is outpacing the globe in growth, the benefits of the phenomenon must percolate down to consumers. Therefore, financial inclusion -- banking the unbanked -- and improving servicing of customers top the agenda. The Banking Annual finds benefits for the aam admi in both.

Source: Business Standard
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Tuesday, March 8, 2011

Bank of India close to buying 51 pct in Bharti AXA Investment

MUMBAI: State-run Bank of India is close to buying a 51 percent stake in Bharti AXA Investment Managers , a joint venture between India's Bharti Enterprises and AXA Asia Pacific Holdings Ltd , the Business Standard newspaper reported on Saturday.

"We are in an advanced stage of negotiations with Bharti AXA for picking up a majority stake in their asset management company," the report quoted an unnamed bank official as saying.

"Things have more or less fallen in place. We are just awaiting the final contours of the deal. The deal is likely to be closed by the end of this month," the official said.

Bharti Enterprises is a group company of India's top telecoms firm Bharti Airtel .

Bharti AXA officials and Bank of India officials were not immediately available to comment.

Given the 60 per cent debt component in Bharti AXA's portfolio, the value of the deal is likely to be two-three per cent of the assets under management, the report said citing industry sources.

By December-end, Bharti AXA was managing assets worth 4.12 billion rupees, it added.

Bank of India officials could not be reached immediately for a comment by Reuters.

Source: EconomicTimes
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Monday, March 7, 2011

SBI launches SMS Unhappy Service

The country's largest lender State Bank of India (SBI), has launched an additional channel for redressing customer grievances- 'SMS Unhappy Service'. The channel is still in its nascent stage as the full-fledged launch is yet to take place.

“We have gone for the soft launch of the programme at all the 14 local head offices (LHOs) located across the country. Once we get a good response from the soft launch of the programme, we will go for a formal launch. As of now, we are getting thousands of complaints from our customers through this channel.” a bank official told FE.

Under this system, LHO's have so-called “Happy Rooms” that deal with the customer grievances. Any customer who wants to lodge a complaint sends the message “Unhappy” to a specified number (8008202020 ). The Happy Room then calls the customer and records the details of the complaint. The complaint is then forwarded to the branch in question.

Source: Financial Express
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Sunday, March 6, 2011

South Indian Bank opens 30 new branches in a day

THRISSUR: South Indian Bank , headquartered in this district of Kerala, Saturday opened 30 new branches at various locations in the country taking its network strength to 640.

Azim Premji, chairman and MD of Wipro, inaugurated the renovated corporate office of the bank here.

Acknowledging that Wipro had huge stakes in banking, Premji said banks in the country had to face the dynamism of a changing world.

"They have to face increased competition and shoulder many new responsibilities, including those pertaining to the rural sector, and serve the less privileged," said Premji.

He said the global economic crisis emanated due to the indiscipline in the US and European banking systems.

"It did not affect the Indian banking system much due to effective steps taken by the RBI ( Reserve Bank of India ) and the self-discipline of banks in India," he said.

"Financial inclusion in India at present compares poorly with its peers in Asia. Bank branches exist only in nine per cent of villages in India. Rural penetration can be increased only by increased use of information technology," said Premji.

Source: EconomicTimes
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Karnataka Bank to raise Rs 457 cr via rights issue

Reuters / Mumbai March 4, 2011, 10:10 IST

Karnataka Bank plans to raise Rs 457 crore via rights share issue, it said in a newspaper advertisement on Friday.

The bank had earlier said its 2-for-5 rights issue at Rs 85 per share will open on March 8.

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