SBI hints at hike in interest rate next week

New Delhi: Country's largest lender State Bank of India (SBI) indicated it could hike interest rates by up to 50 basis point next week. "It (interest rates review) is happening next week because asset liability committee has to meet next week. So you can expect some transmission next week or the week after ...25-50 basis points perhaps," SBI Chairman, Pratip Chaudhary said on the sidelines of board meeting. Banks have been raising interest rates following a hefty 50 basis points increase in key policy rates undertaken by RBI in its first quarterly...

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State Bank of Travancore, Union Bank raise lending rates by 50 bps

NEW DELHI: State-owned lenders Union Bank and the State Bank of Travancore (SBT) on Friday raised their lending rates by 50 basis points, following the hike in key policy rates by the Reserve Bank last month. After the rate increase, Union Bank's base rate, or the minimum lending rate, would be 10.75 per cent per annum, while SBT's rate would stand at 9.75 per cent, the banks said in two separate statements. Besides, SBT raised its benchmark prime lending rate (BPLR) from 14.50 per cent to 15 per cent. The new rates would be effective from Monday,...

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SBI to take a view on merger of associates in mid-2012

NEW DELHI: Country's largest lender State Bank of India (SBI) on Saturday said it will take a view on consolidation of its remaining five associates in the next fiscal. "We will take a view (on merger of associate banks) in mid-2012," SBI Chairman Pratip Chaudhuri said after a board meeting addressed by Finance Minister Pranab Mukherjee here. SBI undertook first ever amalgamation of its associate State Bank of Saurashtra in 2008, followed by State Bank of Indore in August last year. "We did the last subsidiary merger of State Bank of Indore and...

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Make the most of tax benefits on interest payments

The benefits towards interest payments for house loan allowed under present income tax laws is dependent on how the money borrowed is used. Here we explore the provisions of the law. For claiming interest benefit, the first and foremost point you should remember is that the benefit is available for the house owned by you, which is ready for occupation. You cannot claim this benefit if you do not own the house, or during the period in which it is under construction. Any interest paid during the period when construction was going on can be claimed...

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SBI went past RBI limit in sanctioning corporate loans

New Delhi: Exceeding RBI's limit on exposure to single borrower, State Bank of India sanctioned loans to corporates such as RIL, IOC, Tatas and HDFC in the past three financial years, the Lok Sabha was informed today. Bank of India also went past the Reserve Bank limit in the last two fiscals and sanctioned Rs 2,819 crore to HDFC, over the prescribed limit of Rs 2,730 crore in 2009-10. Besides, it gave Rs 405 crore above the limit to SIDBI. In a written reply, Minister of State of Finance Namo Narain Meena said the country's largest lender SBI...

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NPAs in the banking sector on rise

NEW DELHI: Bad assets of the banking sector have increased by Rs 7,718 crore from March 2011 to June 2011, said finance minister Pranab Mukherjee. The gross non-performing assets of public sector banks stood at Rs 78,119 crore at end of June 2011. "The increase in NPAs has been broadly on account of global economic situations, impact of business cyclicality and economic slowdown" said Mukherjee, adding that delay in implementation of projects due to various reasons which lead to restructuring of accounts was also responsible for the rise in bad...

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SIDBI to disburse Rs 1,000 cr to MFIs

Small Industries Development Bank of India (SIDBI) plans to disburse around Rs 1,000 crore in credit to microfinance institutions (MFIs) during FY12, which is 19% more than the loaned amount last fiscal. "We are not shying away from lending to MFI sector in the recent time. Rather, we do have a target of disbursing around Rs 1,000 crore of loan in the current fiscal against Rs 840 crore of advances last fiscal," SIDBI Deputy Managing Director NK Maini told reporters on the sidelines of a seminar on ‘Microenterprise Financing’ here. The small scale...

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Bank strike disrupts normal banking operations

New Delhi: Banking operations have been affected across the country today with employees of public sector and old private sector banks going on a day-long strike in protest banking sector reforms. "About 10 lakh bank employees and officers working in public sector banks, old private banks, cooperative banks and regional rural banks are on strike," United Forum of Bank Unions (UFBU) convener C H Vekatachalam claimed. UFBU is an umbrella organisation of five workman unions and four officer unions of public sector and private sector banks in the country. Operations...

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Axis Bank set to raise $240 mn

Private sector lender Axis Bank would raise $240 million through the sale of US commercial papers (USCPs) over a week. The debt instruments have been rated ‘A-1’ by Standard & Poor's rating agency and the fund raising programme would be supported by Citibank NA. “The funds raised would be deployed in our overseas operations, including lending,” said Parthasarthy Mukherjee, head (treasury and international banking), Axis Bank. He said global interest rates continued to be low and the cost would be passed on to borrowers. The USCPs would have...

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Government-union talks fail; Aug 5 bank strike on

Vadodara: The United Forum of Bank Unions (UFBU) Thursday said it will go ahead with the nationwide bank strike on August 5 after failure of two rounds of conciliation talks with the Central Government. The UFBU, an umbrella body of the unions of all hues in the banking industry, has given the strike call. It held two rounds of talks (on Monday and Thursday) with N K Prasad, Chief Labour Commissioner, Union Labour Ministry, in the presence of representatives of the Indian Banks Association (IBA) in Delhi, UFBU Convener C H Venkatachalam said. The...

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Strike to affect banking operations tomorrow

New Delhi: Banking operations across the country are expected to be affected on Friday due to a day-long strike by banks employees protesting against the proposed banking sector reforms. “Over ten lakh employees will be a part of the strike and you will see a direct impact on all the arms of banking across the country," Vishwas Utagi of All India Bank Employees Association said. He said crucial banking arms such as clearing houses, forex departments, call money markets and the Reserve Bank offices too would remain closed. Utagi said bank employees...

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HDFC Bank opens branch in Leh

LEH: The country's second largest private sector lender HDFC Bank on Thursday opened its first branch in Leh, one of the highest locations in the world, and plans to add about 600 branches across the country during the current fiscal. With the opening of this branch, it has become the first new generation private sector lender to open a branch in this Himalayan region. Besides HDFC Bank, other banks having operations in the city include State Bank of India, Punjab National Bank and Jammu and Kashmir Bank. The bank plans to take branch network...

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Treat all home loan customers alike

The Damodaran committee on bank customer service has recommended that they do not discriminate between new and old home loan customers with identical risk profiles, on the basis of interest rate offers. According to the report, which has been given to the Reserve Bank of India, banks should allow customers to switch their loans from floating rates to fixed rates and vice-versa at least once during the tenure, “at an appropriate and reasonable fee”, to enable borrowers to take advantage of favourable interest rates. “In a floating interest rate...

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Banks can issue prepaid instruments only to listed cos: RBI

The Reserve Bank of India (RBI) today said prepaid payment instruments such as smart cards, magnetic stripe cards, mobile wallets could be issued by banks only to corporates listed in India. In a circular issued to all banks, the RBI said, "Prepaid payment instruments can be issues only to corporate entities listed in any of the stock exchanges in India." It further said the corporates would have to verify the identity of the employee to whom the card would be issued, along with copies of photograph and a proof of identity. "The corporate is also...

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SEBI starts web-based complaint system

Mumbai: In a bid to better streamline the database, market regulator SEBI has operationalised a centralised web based complaints redress system where all investor complaints would be processed. "SEBI has commenced processing of investor complaints in a centralised web based complaints redress system 'SCORES'," it said in a circular. The SEBI Complaints Redress System (SCORES), as the new system is called, would act as centralised database of all complaints and facilitate online movement of complaints to the concerned intermediaries. Besides, online...

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Indian Overseas Bank revises interest rates

CHENNAI: Public sector Indian Overseas Bank has revised the interest rates for its domestic and NRO (Non-Resident Ordinary) term deposits with immediate effect. According to a bank statement, rates for deposits for period 91 to 120 days has been revised from 7.25 per cent to 7.75 per cent while for those 121 to 179 days it has been revised from seven per cent to 7.75 per cent. The rates for the deposits 180 to 269 days has been hiked from 7.25 per cent to eight per cent while for those deposits ranging between 270 to 332 days it has been increased...

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StanChart India profit falls 39%, IDRs up 1%

Mumbai: UK-based Standard Chartered PLC today reported a 39 per cent dip in its India operations (IDRs listed on BSE) during the first half of the current fiscal and said its business in the country was getting affected due to 'governance concerns'. While the bank attributed fall in its profit to rising interest rates and growing competition from rivals, it also expressed concern over business sentiment in India being "impacted on the back of governance concerns." During January-June 2011, Standard Chartered (India)'s operating profit fell to USD...

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RBI committee proposes secure and customer friendly measures to make banking sector more secure

MUMBAI: With a view to making banking sector more secure, the RBI has proposed several measures, including introduction of a system under which a person would be able to block his stolen ATM card through an SMS. The RBI has also proposed a raise in insurance on bank deposits to Rs 5 lakh and having a single common toll free call number for all banks, besides zero liability against loss in ATM and online transactions. These form part of the recommendations of the Committee on Customer Service in Banks, constituted under chairmanship of former...

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IOB to raise Rs 3,500 cr for expansion

Public sector Indian Overseas Bank (IOB) today said it would be raising around Rs 3,500 crore in core tier-I capital over the next three years to fund expansion. Tier I capital is the core measure of a bank's financial strength from a regulator's point of view. "We will be needing roughly Rs 1,200 crore per annum for the next three years given the expansion plans which we have drawn up," the Chennai-headquartered bank's executive director Nupur Mitra told reporters here. IOB Chairman and Managing Director M Narendra said the bank had already written...

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HDFC Bank to offer more credit cards to non-account holders

In a shift from its traditional practice of offering credit cards to its captive clients, HDFC Bank, India’s second-largest private sector lender, is now offering more cards to people outside its existing client base. Currently, customers outside the bank’s existing client base account for 25 per cent of its card base, compared with 10 per cent a year ago. According to Pralay Mondal, country head (retail assets and credit cards), the move is in line with the bank’s strategy to enter the high-end cards segment. “As we go to super-premium clients,...

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