SBI re-enters CD market, raises Rs 1,500 crore

State Bank of India (SBI) raised around Rs 1,500 crore via certificates of deposit (CDs) in the past two days. Following the huge success of its retail bond issue, the country’s largest lender in the beginning of March had said it would not tap CDs or offer higher rates on bulk deposits. It had raised Rs 5,500 crore through the retail bond issue. “There are no liquidity issues as such. These are more for trading purposes. There is still an opportunity to earn 40-50 basis points,” said a senior SBI official. SBI raised Rs 150 crore via 3-month CDs...

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IDBI Bank eyes 15-20% growth in loans to mid-size firms

IDBI Bank plans to increase its lending to mid-size companies by 15 to 20 per cent annually in the medium term to grab higher business share and support bottom line. There is robust demand for funds from mid-size companies (with a turnover of Rs 100 crore to 500 crore). They also provided better margins, as against large companies, who had more options to raise funds, IDBI Bank Executive Director Vinay Kumar said. At the end of December 2010, the bank’s outstanding loan portfolio for the mid-size segment was at Rs 30,000 crore. It was lending to...

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Banks urge RBI to retain priority status for MFIs

Banks have urged the Reserve Bank of India (RBI) against withdrawing the priority sector status for loans extended to microfinance institutions (MFIs). “Our main reservation is that nothing should happen which could result in the withdrawal of priority sector status,” said K Ramakrishnan, chief executive officer of the Indian Banks’ Association (IBA). “Banks will always analyse, assess and conduct the required due diligence before giving loans to MFIs. However, if the latter don’t follow the regulations, banks should not be penalised. This was...

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India Inc in banking: Watchdog warning

New Delhi: India Inc's entry into the banking business is creating problems for the authorities who are looking to guard against those entities which may seek to manipulate the business. The government is considering adding more teeth to Reserve Bank of India to deal with banking sector problems before permitting private sector entities to float commercial banks. Empowering RBI is essential for obtaining information about other businesses of the corporate houses seeking banking licences, in order to protect depositors' interests, official sources...

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Nokia joins mobile money transfer business in India

NEW DELHI: Handset maker Nokia is the latest to join the mobile money transfer bandwagon in India. The cellphone maker along with Union Bank of India launched a mobile-to-mobile cash transfer service called Union Bank Money on Monday, which would allow any mobile users on any network to shop, pay utility bills, top-up prepaid cards using only a mobile phone. Both Nokia and Union Bank of India said their offers would help the Indian government address its social obligation of financial inclusion, especially in rural areas. More than 800 million...

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IDBI Bank launches multi-currency remittance facility

Mumbai: The youngest public sector lender IDBI Bank has launched a multi-currency remittance facility to make payments in miscellaneous currencies, taking its remittance offering to over 125 bills.The facility offers transparency to the customers in terms of exchange rates and insulates against subsequent volatility, the bank said in a release. The facility will be available to all customers of IDBI Bank for both trade and non-trade payments at its all branches. The bank has an aggregate balance sheet size of Rs 2,84,729 crore as on December 31,...

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$1 mn currency note on sale for Rs 2 lakh!

Indore: Four persons have been arrested for trying to sell a fake USD one million currency note here. Acting on a tip-off, police laid a trap and arrested Mohammad Taj of Asansol district in West Bengal, along with Radheshyam Luniya, Narendra Dangi and Prem Narayan Rathod – all from Madhya Pradesh -- yesterday, police said today. The accused were trying to sell the note for Rs 2 lakh. Luniya had been arrested twice earlier for circulating fake Indian currency notes, according to the police. In April last year, the city police had arrested three...

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Union Bank Of India seeks to operate in Australia, Belgium seeks

New Delhi: Union Bank Of India is seeking licences to open branches in Australia and Belgium and has received the RBI's nod to set up a subsidiary in the UK, its chairman said on Friday. The lender expects FY12 net interest margins at 3.1 per cent, M.V. Nair said. Source: Financial Expr...

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India Inc slams RBI rate hike

New Delhi: India Inc's reaction, to RBI raising rates by 25 bps, was quick and furious indeed. Industry said the continuous monetary tightening by the Reserve Bank will affect "adversely" growth prospects of the country. "Series of hikes in repo and reverse repo rates have had a visible impact on the industrial production numbers, which have decelerated substantially in recent months," industry chamber Ficci said. The Reserve Bank has raised its short-term lending and borrowing rates, for the eighth time since March 2010, by 25 basis points in...

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RBI hikes key interest rates by 25 bps

Mumbai: Borrowers will have to pay more for their home and auto loans as the Reserve Bank today announced an increase of 25 basis points in key policy rates-- 8th hike in one year--in a bid to contain spiraling prices of essential commodities. Bankers said they will take a call on rates next month but ruled out an immediate hike in interest rates. The Reserve Bank of India (RBI) in its mid-quarterly policy review raised repo (short-term lending) and reverse repo (borrowing) rates to 6.75 and 5.75 per cent respectively. RBI injects liquidity through...

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Experts draw 'Laxman rekha' on RBI hikes

New Delhi: With the RBI raising rates for the 8th time, experts have drawn a danger line for the Indian economy, reminding one of the proverbial 'Laxman rekha' that was to safeguard Sita – the consequences are there for all to see in the epic 'Ramayana'.Terming the RBI's move to raise key policy rates by 25 basis points as in-line with market expectations, analysts said the apex bank should not go for any further rate hikes in the current year in order to keep the India growth story intact. The Reserve Bank of India today raised its short-term...

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9.5% EPF interest rate may get OK'd

New Delhi: After months of haggling, the Finance Ministry is expected to concede to the EPFO’s proposal for an additional one per cent interest rate on retirement savings. This will mean that the 4.72 crore subscribers of the Employees’ Provident Fund Organisation will enjoy an interest rate of 9.5 per cent on their Provident Fund deposits in 2010-11. “The Ministry is expected to notify the 9.5 per cent interest rate soon,” said an official. This is expected to come with certain riders — the EPFO will have to update members’ accounts within six...

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UBI expects Rs 308-cr infusion

United Bank of India (UBI) on Thursday said it was expecting the government to infuse Rs 308 crore into the bank by the end of this month. The infusion will be part of the government’s recapitalisation programme wherein it was injecting funds into public sector banks to shore up their capital adequacy ratio. “We hope to have a capital infusion of Rs 308 crore by the end of March,” said Bhaskar Sen, chairman and managing director, United Bank of India. Asked about the fundraising plans of the Kolkata-based lender, which got listed last year, Sen...

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Deposit rates may have peaked, but loans likely to cost more

Following the rise in key policy rates by the Reserve Bank of India (RBI), banks are expected to raise lending rates. However, deposit rates may have peaked already, according to bankers. The central bank has raised the repo and reverse repo rates by 25 basis points (bps) each to tackle inflation. Also, based on the evolving growth and inflation scenario, RBI is likely to persist with its anti-inflationary stance.“Deposit rates may not rise as there has been a substantial increase over the past few months. However, banks may pass on the increase...

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Mukesh Ambani on Bank of America board, first non-American member

MUMBAI: Billionaire Mukesh Ambani , chairman of India's most valued company Reliance Industries or RIL, has joined the board of the Bank of America Corporation, the largest US lender by assets. Mr Ambani's nomination will be ratified at the bank's annual meeting of shareholders. "Bank of America's shareholders will benefit from the global perspective Mr Ambani brings to our board," Bank of America's chairman Charles O. Holliday, Jr was quoted as saying in a press statement issued late Wednesday evening, Indian time. "It is a privilege and a great...

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I-T's claims in Harshad scam cleared

MUMBAI: Nearly two decades after the Harshad Mehta scandal resulted in claims worth thousands of crores, the Income-Tax department has got its full share of the amount that was due from the late stock broker . The State Bank of India, or SBI, and Standard Chartered, however, may have to wait for some more time before their dues are cleared. The I-T Department and State Bank of India together received payments totalling 2,195 crore on Wednesday in the largest disbursement of claims against losses incurred on account of the 1992 securities scam....

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MFIs in India are money-spinning machines: Yunus

KOLKATA: Muhammad Yunus , the celebrated pioneer of micro finance, has criticised India's microfinance practitioners for turning the sector into a money spinning opportunity. The Nobel Peace Prize winner in 2006, jointly with Grameen Bank for creating economic and social development from below in Bangladesh, said microfinance activities in India have taken a wrong turn and referred this as one of the major reasons behind the near-collapse of the sector. "I feel sorry for the current situation in microfinance sector in India," Yunus said in an...

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FIIs bid $4.3 bn for G-sec, corp bonds

Mumbai: Foreign institutional investors (FIIs) put in bids for about $4.3 billion of Indian government securities and corporate bonds, or nearly double the stock on offer, indicating robust appetite for Indian debt, five market sources said on Wednesday.Foreign investors bid for around 97 billion rupees ($2.1 billion) of corporate bonds against 27 billion rupees on sale, as the paper did not have any sector or tenor restrictions. They bid 98 billion rupees of government bonds, compared with around 75 billion rupees on offer for maturities of more...

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RBI likely to raise policy rates by 25 bps

New Delhi: Amidst high food inflation, falling industry output and uncertain crude oil prices, the Reserve Bank is likely to raise key policy rates by 25 basis points in its mid-quarterly review on Thursday, say experts. The RBI is expected to hike interest rates by 25 basis points, said State Bank of India (SBI) Chief Finance Officer (CFO) Hemant Contractor. Despite moderation, food inflation is still high at 9.52 per cent on account of rising prices of essential items. At the same time, factory output grew by 3.7 per cent in January compared...

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Exim Bank to provide line of credit to Malawi

Mumbai: The Export-Import Bank of India (Exim Bank) has entered into an agreement with Malawi for providing a USD 50 million line of credit for financing exports and consultancy services for projects in the African nation. The credit agreement under the line of credit (LoC) is effective from February 23 this year and the date of execution of the agreement is February 1. "Exim Bank has concluded an agreement dated February 1, 2011 with the government of Malawi, making available to the latter a LoC of USD 50 million for financing eligible goods and...

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Mobile money transfer fee cut to 10p

Mumbai: National Payments Corporation of India (NPCI) has reduced the switching fee for mobile money transfers using the inter-bank mobile payment service (IMPS) to 10 paise from the proposed 25 paise for a successful transaction to the remitting bank. It would be effective from April 1 until the end of the next fiscal.“We have waived the fee for the current financial year (till March 2011) to promote this product. This service was launched in November last year. As of today, we have already issued 66 lakh mobile money identifiers (MMIDs) — the...

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Tata Steel plans Rs 1,500-cr perpetual bond sale

Tata Steel Ltd, the country’s biggest producer, aims to raise as much as Rs 1,500 crore ($332 million) in the nation’s first sale of rupee perpetual bonds by a non-finance company, two people with direct knowledge of the matter said. JPMorgan Chase & Co and ICICI Bank Ltd will arrange the sale, said one of the people, declining to be identified because the matter is confidential. The Mumbai-based company will pay a coupon of 11.8 per cent on the bonds, which can’t be called for redemption for the first 10 years, the person said. Tata Steel...

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