RBI issues operational guidelines for financial inclusion

The Reserve Bank of India (RBI) on Friday issued operational guidelines for the implementation of a transfer system for servicing low-value accounts and extending banking infrastructure to under-served low income areas. The regulator asked banks to follow the 'one district-many banks-one leader bank' model in villages in which the designated bank under the financial inclusion plan and the fund-transfer system varied. According to guidelines, the state government shall designate the leader bank, in consultation with RBI's regional office and the...

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5 years on, MF SIPs hold their own

Mumbai: True, the stock markets have been battered and investor sentiments badly hit. But systematic investment plans (SIPs) of mutual funds still seem to be generating modest returns for retail investors who reposed their faith in the stock markets over the long term. In the last five years or even over a three-year period, the Bombay Stock Exchange’s (BSE’s) benchmark index Sensex witnessed high volatility and saw the highs of 21,000 (in January 2008 and November 2010) and deep lows of 8,160 (in March 2009). But, the systematic investment style...

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HDFC Bank to raise rates from tomorrow

New Delhi: India's second largest private lender HDFC Bank has decided to raise its lending rates by 50 basis points in line with its peers making its home, auto and corporate loans more expensive. The base rate, or the minimum lending rate, of HDFC Bank will become 10 per cent from the existing 9.50 per cent, sources said. At the same time, the benchmark prime lending rate (BPLR) of the bank is expected to be increased by similar percentage points to 18.50 per cent. The bank has also decided to raise fixed deposits rates by up to 75 basis points...

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Irda releases norms for stake transfer by insurance firms

The Insurance Regulatory Authority of India (Irda) today made it mandatory for insurers to seek prior approval in case of stake transfer to domestic entities or financial institutions and set guidelines for seeking approval. As per an Irda circular, the regulator will carry out the requisite due diligence of the proposed transferee or shareholder prior to grant of approval for registration of transfer of shares under the provisions of section 6A(4) of the Insurance Act, 1938 and for issue of shares to the proposed transferee or shareholder. The...

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SBI scales down rights issue proposal

State Bank of India (SBI), the country’s largest lender, has scaled down the requirement of funds from the government for its proposed rights issue. The government-owned bank, which had earlier requested for Rs 20,000 crore from the government, has now settled for Rs 5,000 crore-Rs 15,000 crore. “We are working on the number and they (the government) are very supportive. It will be required for capital. A part of it would come from internal accruals. The details are being worked out,” said Chairman Pratip Chaudhuri. “The amount we have put on the...

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ICICI, HDFC banks battle for mkt share

The stage is set for the country's top two private banks to test their skills in pursuit of market share. After consolidating its balance sheet for 18 months, ICICI Bank now plans to be more aggressive, while HDFC Bank is in no mood to allow its bigger rival regain lost market share. The current macro-economic situation is similar to the economic crisis of 2008. If it was the collapse of US' fourth-largest investment bank, Lehman Brothers, which triggered the biggest financial crisis of the decade three years back, Standard & Poor's decision...

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SBI seeks between Rs 50 billion-Rs 150 billion capital infusion from government

MUMBAI: State Bank of India ( SBI) , the country's top lender, has sought a capital infusion of between 50 billion and 150 billion rupees ($1.1 billion-$3.3 billion) from the government, its chairman said. The state-run lender needs funds to meet its future credit growth requirement. "We have not zeroed in the number. The number that we have put on the table is between 50 to 150 billion rupees from the government...and simultaneously through internal accruals," Pratip Chaudhuri told reporters on Thursday. "It may come in (tranches) ... It may...

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Kotak Mahindra sees growth from semi-urban, rural biz

Kotak Mahindra Bank expects loan demand from semi-urban and rural areas to boost business in this fiscal year, while credit growth for the sector could be lower than the central bank's projection of 18%, a top official said. "I think the next big challenge for Indian banks is really how well they manage the credit cycle," Managing Director Uday Kotak said. "I do believe the credit demand in India, which has grown at about 20%-plus last year, ...coming to about 15 percent this year."Kotak Mahindra is cautious about lending to sectors such as infrastructure,...

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Global uncertainties not to impact overseas expansion: BoB

Bank of Baroda (BoB) today said it was expanding its overseas presence in Kenya, Uganda, Australia, New Zealand and Gulf countries with 15 more foreign branches by March 2012 despite economic uncertainty in the US and Europe. "BoB's overseas business is growing at 35% annual rate even as developing counties are not doing too well and taking time to recover from the global economic stress in 2008," BoB Chairman MD Mallya said here today on the sidelines of a Ficci organised banking conclave. "Our overall business model that we follow overseas is...

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SBI, ICICI Bank up lending rates by 50 bps

Mumbai: Country's top two lenders SBI and ICICI Bank on Thursday announced a hike in lending rates by 50 basis points each, making their home, auto and corporate loans dearer. With this hike, borrowers will have to pay higher EMIs and the tenure of their home and auto loans could also be extended. A large number of borrowers will be impacted by the hike as both the banks together enjoy over 30 per cent market share. Both SBI and ICICI have increased the base rate, or the minimum lending rate, to 10 per cent from the existing 9.50 per cent, they...

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Manappuram Finance to raise Rs 750 cr from bonds

Mumbai: Pure-play gold loan company Manappuram Finance on Thursday joined a growing breed of financiers opting to raise debt in a rising interest rate regime and increasing market volatility, and said it will raise Rs 750 crore through from bond issue. The non-convertible debenture issue, opening on August 18 and closing on September 5, offers interest rate up to 12.20 percent annually on the two-year bond. The face value of each bond is Rs 1,000 with a minimum subscription of five bonds and will be listed on the Bombay Stock Exchange. The fund...

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RBI issue draft guidelines on IRB approach

The Reserve Bank of India (RBI) today said it planned to allow banks to calculate at their own the capital requirement to handle credit risk if they meet certain criteria, like risk oversight norms and corporate governance. The central bank has issued a draft guidelines for allowing banks to shift to Internal Rating Based (IRB) approach. Under this scheme banks are allowed to use their own internal estimates for some or all of the credit risk components in determining the capital requirement for a given credit exposure. "This [draft] guideline...

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RBI panel for hassle-free remittance, investment

The Reserve Bank of India (RBI)-appointed panel today suggested significant liberalisation of forex regulation to allow hassle-free remittances and overseas investments. "To enable hassle-free remittances by resident individuals, banks may be advised by the RBI not to insist on the submission of form 15 CA/15 CB for any remittances under the Liberalised Remittance Scheme (LRS)," the report of the panel headed by former RBI Deputy Governor KJ Udeshi said. The report of the Committee to Review the Facilities for Individuals under Foreign Exchange...

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Bank deposits plunge in Punjab

Chandigarh: Bank deposits seem to be losing attraction among people in Punjab despite alluring interest rates, with deposit mobilisation growth in the state shrinking to 7.5 per cent, compared with pan-India deposit growth of 18 per cent. Most importantly, the deposit mobilisation has even turned negative in the urban sector (having over one-third share in total deposits) which means people living in industrialised cities like Ludhiana, Jalandhar are withdrawing their cash from banks and keeping it in other high margin investment options, bankers...

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Youth tries to debit Sachin Tendulkar's acct with 'dummy' card?

Mumbai: Mumbai police were taken aback when they found a leading bank's debit card with master-blaster Sachin Tendulkar's name on it in the possession of a college student. The police arrested the youth, to find out later that it was a dummy card issued by the bank for "educational" purpose. Shoyeb Doodhwala (21), a college-student, was arrested yesterday after he came out of an ATM centre in Lalbaug area. He was found to have four debit cards of three banks – ING Vyasa, ICICI and Kotak Mahindra Banks -- police said. Kotak Mahindra Bank's debit...

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SBI opens first outlet for gold loans in north India

Chandigarh: State Bank of India (SBI) today opened an exclusive outlet for instant gold loans here. This is the first outlet of its kind at bank level where borrowers can obtain loan against their gold ornaments at attractive rate of interest, said a SBI release. SBI also inaugurated Self Service Kiosk (SSK) Project at Punjab University. This kiosk would de-congest the branch counters and increase the usage of Debit Cards. Customers can make various financial and non-financial transactions on these kiosks using their ATM-cum-Debit Cards. SSK is...

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Subbarao starts another long haul

In 2008, within days of taking charge as the Reserve Bank of India’s (RBI) governor, Wall Street investment bank Lehman Brothers collapsed and the world went into a recession—the aftershocks of which were felt in India. In a startling similarity, his re-appointed comes only a few days after the sovereign rating of United States was downgraded by Standard & Poor's, for the first time in financial history and the world stares at another economic slowdown, with India preparing for the after effects. During his first term, Subbarao had to immediately...

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IDBI Bank to lend Rs 700 cr more to microfinance firms

IDBI Bank plans to lend Rs 700 crore more to microfinance companies by the end of this financial year, a top official said on Tuesday. "We have exposure of about 800 crore, and we can take it to about 1,500 crore by the end of the fiscal," Executive Director RK Bansal said. He said the Reserve Bank of India's (RBI) guidelines for the sector issued in May have brought about clarity and now "things are okay" in the sector. The central bank had in May issued regulations for the microfinance sector and capped at 26% the interest rate that these firms...

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Citi India ramps up markets team

Citibank India today said it had made key appointments in its markets team primarily to further strengthen its fixed income, currencies, commodities, credit trading and equities businesses. "Citi has made several significant hires strengthening our credit markets trading, structuring and commodities businesses," Citi India Managing Director and Head of Markets Pankaj Vaish was quoted as saying in a statement issued here. Fixed income, currencies, commodities, credit trading and equities products and services will be the areas which will get strengthened...

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RBI Governor Subbarao gets 2-year extension

New Delhi: The government gave a two-year extension to Reserve Bank Governor D Subbarao to ensure continuity of India's monetary policy at a time when the whole world is reeling under the fallout of the downgrade of the sovereign rating of the US. "It (extension) will be good because at this point of time, extension of the RBI Governor is needed. Though there was time till September, we decided (that) we should do it quickly to ensure that there is no uncertainty," Finance Minister Pranab Mukherjee told reporters after announcement of Subbarao's...

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PSU banks exposure in Noida realty projects at Rs 2,166cr

New Delhi: The public sector banks have sanctioned a total of Rs 2,166.2 crore as home loans and other construction loans in Noida realty projects, the government on Tuesday informed Parliament. "RBI has reported that 'Noida Extension' does not appear as a 'banked centre' in the master office file on banks," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha. He was replying to a query regarding the total quantum of housing loans extended/approved for home buyers by various public sector banks for housing...

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RBI: Will ensure liquidity

Following Standard & Poor’s downgrading of the long-term US sovereign rating from AAA to AA+, with negative outlook, on Friday, government securities and foreign exchange markets saw volatile trade on Monday. While the rupee weakened to its lowest in five weeks during early trade, bond yields fell to a three-week trough, as investors sought safe-haven government securities. Anticipating volatility in financial markets, the Reserve Bank of India (RBI) issued a statement before the start of trade on Monday to calm investors. It said it was the...

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