Eight banks fail Europe stress test

London: Eight European banks have failed a test of their ability to withstand a long recession and will have to raise just 2.5 billion euros ($3.5 billion) of capital, significantly less than expected. The European Banking Authority said five banks in Spain, two in Greece and one in Austria flunked the "stress test", which made 90 lenders reveal for the first time their profit forecasts, a breakdown of their sovereign bond holdings and funding costs. Expectations were for five to 15 banks to fall short and need to raise 10 billion euros or more...

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Muthoot Finance to offer loans against gold ETF units

Muthoot Finance Ltd, the largest gold financing NBFC in India, has launched a scheme to offer loans against the security of gold Exchange Traded Funds (ETFs). Launching the service, George Alexander Muthoot , managing director, Muthoot Finance Ltd said that through loan against gold ETF Muthoot Finance plans to service the financial requirements of newer customer segments. The new scheme that would be available to the customers by the end of July 2011 would enable them to avail finance against their gold ETF units to the extent of 85% of the...

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RBI tells unlicenced foreign entities to get a clearance from it

KOLKATA: Reserve Bank of India has told foreign agencies operating in India without its consent to approach it for a formal clearance. The central bank found that liaison offices or branches established by overseas NGOs, news agencies and other foreign entities are continuing to function in India without prior approval. Under the Foreign Exchange Management Act (FEMA), 1999, foreign entities can open offices only after receiving permission from RBI. This norm has come into effect since June 1, 2000. RBI consults with the government about such...

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Banks' Q1 seen mixed; private sector to outperform

MUMBAI: Top lender State Bank of India will likely be alone among major Indian banks to post a fall in profit for the June quarter, on slower credit growth and higher provisions, but margins for most banks may shrink on higher deposit rates. Private banks led by No. 2 ICICI are forecast to outperform their state peers in the June quarter and analysts, who have mostly neutral or underweight ratings on the sector, said they may consider lifting their view if June quarter results meet or beat expectations. "Next one or two quarters are going to...

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United Bank hikes lending rate by 25 bps

Public sector lender United Bank of India today hiked its lending rate by 25 basis points (bps), a move set to make auto, home and corporate loans more expensive. "...The bank has increased its base rate and prime lending rate by 25 bps to 10.25% and 14.50% respectively," United Bank said in a filing on the Bombay Stock Exchange (BSE). The hike in both rates is effective from July 13, 2011.Rate hikes by banks come in response to the interest rate hike by the Reserve Bank last month in its mid-quarterly review of credit policy 2011-12. The RBI had...

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SBI open to FPO, private placements

The country’s largest lender, State Bank of India (SBI), on Thursday said it would examine options like private institutional placements and a follow-on public offer (FPO), if the government did not subscribe to its rights issue fully. To fund growth, the bank plans to raise Rs 20,000 crore through a combination of rights issue and other instruments by March 2012. It expects a final decision on the matter by the second or the third quarter of this financial year, said Chairman Pratip Chaudhuri on the sidelines of the Federation of Indian Chambers of Commerce and Industry Banking Conclave on Thursday . “We are in talks with the government for a rights issue of Rs 20,000 crore and the government...

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EPFO appoints 4 fund managers for its Rs 3.5 lakh cr corpus

New Delhi: Retirement fund manager EPFO today decided to appoint four fund managers -- SBI, HSBC AMC, Reliance Capital and ICICI Securities Primary Dealership – for managing its huge corpus of Rs 3.5 lakh crore for three years beginning September 1, 2011. The decision was taken here by EPFO's apex decision making body Central Board of Trustees (CBT), headed by the Labour Minister. "The CBT has approved appointment of four fund managers -- SBI, HSBC AMC, Reliance Capital and ICICI Securities Primary Dealership for managing EPFO funds for three years...

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UCO Bank waives charges to get low-cost deposits

UCO Bank has decided to waive all the charges to attract more customers to the bank and boost its low-cost deposit. Low-cost deposits, or the current and savings account deposits—only 24 per cent of the bank’s total deposits—are lower than those of its peers. The Kolkata-based lender aims to increase its Casa share to 35 per cent by the end of December. UCO bank today launched a scheme, 'Total Freedom', which offers services like issuance of cheque books, demand drafts, fund transfers and balance statements to its customers for free. The bank has...

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SBI against savings rate deregulation

Country's largest commercial bank State Bank of India (SBI) has said it was against deregulation of savings bank interest rates. "We are not in favour of savings interest rate deregulation," SBI Chairman Pratip Chaudhuri said. He said there was an impression that the banks were sitting on a huge pool of savings deposits. It is to be noted that RBI in its draft discussion paper floated in April favoured deregulation of the interest rate on savings banks accounts. Chaudhuri said the margins on interest rates were required to finance delinquencies...

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RBI wants all PSBs to have uniform pension provision

After coming down heavily on banks for not making adequate provision for increased pension liabilities arising out of wage revision, the Reserve Bank of India (RBI) now wants all public sector banks to have uniform pension liabilities. According to sources in the banking industry, the central bank sees no reason why each public sector bank should have different pension liabilities, since the inputs which go into calculation of pension provision are nearly the same. “RBI says the salary structure is same, the mortality rate is similar and the attrition...

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Allahabad Bank to take MTN route to raise $500 million for hong kong business

KOLKATA: Allahabad Bank has decided to engage four arrangers, including JP Morgan , to raise $500 million in medium-term notes overseas to fund its burgeoning Hong Kong business. The bank will issue dollar-denominated MTN for a tenure of five-and-a-half years and list it. According to executive director MR Nayak, the other arrangers to manage it are HSBC Holdings , Royal Bank of Scotland and Standard Chartered . "We would like to raise the fund in the next 6-8 weeks," bank chairman and managing director JP Dua told ET. It needs to get a credit...

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Bank of Maharashtra ups lending rates by 25 bps

MUMBAI: The state-run Bank of Maharashtra on Thursday revised upwards its base and lending rates by 0.25 percent each to 10.25 and to 14.50 per cent respectively. "The new rates will be effective from Saturday," the bank said in a release here. The MahaBank's base rate or the minimum rate below which it cannot lend to anyone, was 10 per cent prior to the revision, while its prime lending rate was hovering at 14.25 per cent, the statement noted. Following the Reserve Bank's tight monetary policy to tame inflation, the key policy rates have gone...

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Banks offer higher rates for deposits of longer tenures

Banks have finally started correcting their liabilities, profile and are now offering higher rates for long-term deposits. Banks' deposit profiles had tilted more towards the shorter end and 60-70 per cent of deposits in the one-year maturity period had resulted in widening of the asset-liability gap, as credit off-take was mostly seen in term loans, which have a tenure of five-seven years. State Bank of India (SBI), the country's largest lender, now offers 9.25 per cent for deposits with a maturity period of one-10 years. Bank of Baroda, which...

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Cabinet may clear SBI, associates merger tomorrow

The government is likely to consider merger of State Bank of India Commercial and International Bank (SBICI) with the country's largest lender SBI at the meeting of Union Cabinet tomorrow. SBICI is a wholly-owned subsidiary of SBI and functions as a private sector bank offering the an array of financial products and services. Cabinet is likely to take-up acquisition of SBICI by its parent SBI, sources said. The board of SBI had cleared amalgamation of SBICI with itself in 2008. As of March 2011, the paid-up capital of subsidiary of SBI stood at...

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Credit is likely to rise at a faster with growth in economy:RBI

Mumbai: Credit offtake from banks grew by 20.1 per cent to over Rs 42 lakh crore during the one-year period ended July 1,2011,indicating an upswing in industrial activity. According to data from the Reserve Bank, credit offtake during the period stood at Rs 42.09 lakh crore against Rs 35.04 lakh crore in the same period of the previous year. Meanwhile, deposits went up to over Rs 56.40 lakh crore till beginning of July this year against Rs 47.81 lakh crore as on July 2, 2010. This is a rise of almost 18 per cent on an annual basis. In the annual...

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4 PSU banks raise interest rates up by 50 bps

New Delhi: As many as three state-owned banks including Oriental Bank of Commerce (OBC) and Indian Bank hiked interest rates by up to 50 basis points While Indian Bank and Allahabad Bank raised base rate, or minimum lending rate by 25 basis points, OBC and IDBI Bank raised deposit rates by up to 50 basis points across select maturities. Chennai-based Indian Bank increased base rate to 10.25 per cent from earlier level of 10 per cent. With the hike, new housing, auto and other loans will become expensive by atleast 25 basis points.Besides,...

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Loan agency fined for naming man defaulter

Be careful while paying back a loan. Any wrong entry by the loan agency can put you in the bad books of the Credit Information Bureau India Limited (CIBIL), leading to considerable harassment whenever you apply for a loan. This is what happened in the case of Devi Singh, a resident of Dariya village in the Union Territory. For a wrong “outstanding” amount of Rs 200, Singh’s name was listed among the defaulters of CIBIL, and he was later denied a vehicle loan. Aggrieved by the humiliation, Singh filed and won a case against Bajaj Auto Finance Ltd,...

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BoB, Kotak Mahindra Bank hike lending rate by 25 bps

Bank of Baroda (BoB) and Kotak Mahindra Bank today announced hiking of lending rates by 25 basis points. Post hike, the base rate, or the minimum lending rate, of BoB would be 10.25% with effect from today, the lender said in a filing to the Bombay Stock Exchange. Also the bank's benchmark prime lending rate (BPLR) stands increased to 14.50%, from 14.25%. Further, BoB also raised rates for short term fixed deposits by 25 basis points. Now deposits up to 270 days will earn an interest of 7.25%. Kotak Bank has also hiked its base rate by 25 basis...

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IOB to raise around Rs 1200 cr this fiscal: Bank CMD

Chennai: Public sector Indian Overseas Bank proposes to raise around Rs 1,200 crore this financial year as a part of augmenting its growth plans, the bank Chairman and Managing Director M Narendra said. A resolution to raise the required capital through Qualified Institutional Placements (QIP), rights issue or through Follow-On Public Offer(FPO) was passed at the Chennai headquartered Bank's 11th Annual General Meeting held in Chennai. “We have planned for a 25 per cent growth in our business. It may be through rights issue, or through preferential...

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