StanChart hikes lending rate by 25 bps

Standard Chartered has increased its minimum rate of lending by 25 basis points to 9.75% to become the second foreign bank to do so since Reserve Bank of India (RBI) raised its key policy rates in July. The rate hike is effective from September 1. "The base rate has been arrived at considering the 6-9 month term-deposit rate blended with current and savings account (CASA) cost, and other elements that are common across all categories of borrowers," the bank said. With an eye on inflation numbers, the RBI has hiked its key rates a record 11 times...

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Indian Bank revises foreign currency rates

Public sector Indian Bank today said it has revised upwards interest rates for the Foreign Currency Non-Resident (FCNR) and Non-Resident (External) accounts with immediate effect. For the FCNR (B) deposits, the revised interest rate has been increased to 1.80% from 1.76% for deposits of one year and above but less than two years, the Chennai-headquartered bank said in a statement. Interest rates for deposits of two years and above but less than three years has been fixed at 1.51% against 1.64% previously. For deposits of three years and above but...

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Bank of America job cuts could reach 30,000

Bank of America Corp executives are discussing plans to potentially shed 25,000 to 30,000 jobs over the next several years, the Charlotte Observer said. Bank of America executives are still working on the final plans regarding the workforce reduction, which could reach much more than 10,000 jobs, the Charlotte Observer reported, citing sources familiar with the matter. Jobcuts at the biggest US bank, which the Wall Street Journal had reported could rise to 10,000 in the coming months, come on the heels of the bank's stock plunging over 40% since...

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LIC eyes 5% sales from bancassurance

Life Insurance Corporation of India (LIC) is looking at a huge jump in premium collected through bancassurance, amid increasing competition from private players. Life Insurance Corporation collected Rs 1,281 crore in premium through bancassurance, which involves using bank branches for selling policies and collecting premia, FY11. This accounted for a little over 0.60% of the total premium collection of Rs 2,03,358 crore. The corporation sold 7 lakh new policies through this channel during 2010-11."Target for the current year is that we want to...

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SBI group's efficiency falls, other banks on a high

India’s largest lender, State Bank of India and its associates, fell behind other banks operating in India in efficiency in 2010-11, with a fall in both profit per employee and return on assets, compared to the previous year. “Profitability in terms of return on assets of all scheduled commercial banks at the aggregate level improved during 2010-11. All bank groups witnessed an increase in return on assets during 2010-11, except State Bank of India and its associates, which witnessed a decline in return on assets,”The Reserve Bank of India (RBI)...

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Allahabad Bank raises interest rate on term deposits

MUMBAI: State-run Allahabad Bank today hiked interest rates on deposits for less than Rs 5 crore with term ranging from one year to less than two years by 50 basis points to 9.5 per cent. The increased rates will come into effect from September 5. "...the Bank has decided to revise the interest rate upward by 0.50 per cent per annum on domestic term deposits scheme for the period from one year to less than two years of below Rs 5 crore...," the bank said in a filing to the Bombay Stock Exchange (BSE). The bank's shares closed at Rs 175.80, down...

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ICBC, two more foreign lenders get banking permission

New Delhi: Reserve Bank has given permission to Industrial and Commercial Bank of China (ICBC) to start operations in India in 2011, the Lok Sabha was informed today. Besides, two other banks Rabobank International (The Netherlands) and Woori Bank (South Korea) have also been given approval to expand their presence in India. In the last calender year, eight foreign banks, including DBS Bank, Credit Suisse AG and Barclays Bank, were given approval by RBI to open branches or expand the existing ones. As of now, 38 foreign banks are functioning in...

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Rights issue is on track, says SBI chief

State Bank India (SBI) today said its Rs 20,000 crore rights issue proposal was on track and the bank was not looking at any other options to raise capital. "Government of India, Department of Financial Services is very much looking into it (rights issue proposal). As of now, there is no interim response (from the government) but it is receiving attention," SBI Chairman Pratip Chaudhuri said. "There is no question of looking at any other option but rights issue is very much on the track," he said, adding, "The amount will be finalised after we...

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StanChart sees commodity trading revenue up 30%

Standard Chartered Plc expects to post a 30 per cent year-on-year growth in its commodity trading revenue in 2011 on strong demand from its clients in Asia, Africa and West Asia, a senior company official said on Thursday. The bank is also looking to expand physical trading in various commodities such as coal, iron ore, palm oil and base metals, Ashish Mittal, the bank’s global head of commodities sales said. “The commodity business is a huge focus area for the bank,” said Mittal, who noted the bank’s commodity clients had doubled in the past two...

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Bank of Maharashtra to offload Rs 9,000 crore bulk deposits by March 2012

KOLKATA: Bank of Maharashtra (BoM) is planning to offload its entire chunk of bulk deposits of Rs 9,000 crore by March next year to control cost and preserve margin, bank chairman and managing director Anup Sankar Bhattacharya told ET. Banks are facing rising cost of deposit as Reserve Bank of India following a tight monetary policy by raising interest rate to tame inflation. BoM's cost of deposit stands at 5.88% while its net interest margin being at 3.18%. "We would lime to maintain NIM at 3.15-3.18% level," Bhattacharya said. Having decided...

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A 10 per cent safeguard

The RBI has issued draft guidelines for private bank licences. These emphasise dispersed shareholding. Proposed rules on entry into banking require that, for a company to get a bank licence, no one entity hold above 10 per cent shares in a company. These rules are similar to those proposed by the Bimal Jalan committee that, for the ownership of an exchange, no one entity hold above 5 per cent shareholding. These rules are on the right track. However, as recent experience in telecom and stock exchanges has shown, enforcing such rules is going to...

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Sidbi revamps loan schemes for MSMEs

The Small Industries Development Bank of India (Sidbi) is to provide equity and quasi-equity assistance to micro, small and medium enterprises in the form of subordinated debt. The financial institution will also float a Flexible Assistance for Capital Expenditure (FACE) scheme, with multiple repayment schedules. These are to be linked to the economic cycle and cash flow of each component. Many small and medium enterprises often fail to get adequate working capital, due to lack of adequate owners’ capital and all assets to be offered as security....

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Bank of America looks to exit correspondent mortgage biz

Bank of America Corp is looking to sell its correspondent mortgage business and the unit's employees could be notified as soon as Wednesday, the Wall Street Journal said, citing people familiar with the matter. The bank had decided to exit the correspondent channel, which employs more than 1,000 people, because it no longer fits with the long-term strategy for its mortgage unit, the Journal said. Correspondents fund loans and sell them to larger lenders. The bank has used the correspondent channel to build origination volume and make...

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Central Bank of India offers special deposit scheme

MUMBAI: State-run lender Central Bank of India today launched a special scheme offering to double depositors' money in seven-and-a-half years. The scheme, christened 'Cent Double', will give an annualised yield of 13.33 per cent and is valid between September 1 and December 31, a statement issued here by the bank said. For senior citizens, the annualised yield stands at a higher 14.93 per cent and the money will double in seven years and three months, it added. For the metros and urban centres, a minimum deposit to be made under the scheme is...

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Rajya Sabha passes SBI Bill

New Delhi: Rajya Sabha on Tuesday passed a bill which seeks to transfer powers to the Central Government from the Reserve Bank of India with regard to SBI subsidiary State Bank of Hyderabad with an amendment moved by a BJP member. The transfer of powers to the Centre has been necessitated after the ownership of the SBI was transfered from the RBI to the Government. The Bill was passed amid din even as the debate on it remained inconclusive. The Upper House saw repeated adjournments after noon following protests by BJP over appointment of Lokayukta...

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Religare forms panel to apply for banking licence

Financial services provider Religare Enterprises on Tuesday said it had set up an advisory panel that would support management's effort in seeking banking licence under guidelines issued by the Reserve Bank of India. Suman Bery, a former special consultant to the RBI, and Kiran Karnik, former president of India's software services association Nasscom, have joined the panel and more would follow, the company said. Religare said it was confident that it would qualify on the all the key norms laid out for new banking licence. Source: Business St...

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SBI NPA provisioning up 3-fold from 2008-09 and 2010-11

The government today said provisioning against the non-performing assets (NPAs) of State Bank of India (SBI) increased more than three-fold to Rs 8,792 crore in 2010-11 from Rs 2,474 crore in 2008-09 due to a rise in bad debt. This provision in 2010-11 includes a countercyclical buffer of Rs 2,330 crore toward achieving the 70% Provision Coverage Ratio prescribed by the Reserve Bank of India over-and-above the prudential provision, Finance Minister Pranab Mukherjee said in a written reply to a question in the Rajya Sabha. The NPAs have gone up...

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New generation banks build 14 per cent market share in deposits & loans

MUMBAI: Since RBI last licensed private banks over 10 years ago, new generation private lenders have built a market share of 14% in deposits and also loans, which is much higher than the combined share of close to 12% of foreign banks, old generation private banks and regional rural banks. That is a reflection of the impact created by these banks, which forced state-run banks to shake off their slothful way of functioning and focus on customers and better service standards and product offerings. In 1993-94, RBI granted in-principle approvals for...

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Corporates welcome RBI's draft norms on banking licences

Mumbai: Welcoming the Reserve Bank's draft guidelines on granting new bank linceces, corporates and analysts on Monday said the norms would pave the way for entry of business houses into the banking space. "We welcome the draft banking guidelines. Clearly, based on eligibility criteria, Aditya Birla Nuvo, which enjoys a significant presence across several key financial services businesses, would fit into the criteria," Aditya Birla Nuvo Chief Financial Officer Sushil Agarwal said. Terming the paper as a well-thought out piece, analysts said the...

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Rs 500 cr min capital to set up new bank

Mumbai: The Reserve Bank of India (RBI) today unveiled the draft guidelines on new banking licences, pegging the minimum required capital to set up a bank by a corporate at Rs 500 crore while limiting the foreign shareholding at 49 per cent. "The minimum capital requirement will be Rs 500 crore. Subject to this, the actual capital to be brought in will depend on the business plan of promoters," the Reserve Bank of India (RBI) said in its draft guidelines on new banking licences. At present, the minimum capital requirement for the banking sector...

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Government committed on SBI rights issue: Pratip Chaudhuri

MUMBAI: State Bank of India Chairman Pratip Chaudhuri today said Government is "quite committed" to infuse funds through the bank's proposed Rs 20,000 crore rights issue. "The Government is quite committed on the rights issue and it is not right for the bank to put a finger on the quantum," Chaudhuri told reporters on the sidelines of an event here. The Government had last week indicated that the rights issue will happen this fiscal itself. According to official sources, the infusion will come through as the Government wants to push the tier-I...

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