Obopay rolls out mobile payment service for Nokia users

With mobile banking steadily gaining pace, the service providers are gearing up to make the most out of it. Obopay, a mobile payment service provider, is all set to expand across the country on the back of a tie-up with handset manufacturer Nokia. The company had earlier joined hands with Union Bank of India and YES Bank. The prepaid service is currently available in 130 cities in India and going ahead will be available at more than 200,000 Nokia Priority dealers, 2,300 branches of Union Bank of India and 214 branches of YES Bank. “Over the past...

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IOB Q2 net up 0.63% at Rs 207.46 cr

Mumbai: Public sector lender Indian Overseas Bank (IOB) has posted a marginal jump of 0.63 per cent in net profit to Rs 207.46 crore for the second quarter ended September 30. The bank had posted a net profit of Rs 206.15 crore in the July-September quarter of 2010. The total income of the Chennai-based lender during the quarter rose to Rs 4,822.56 crore, from Rs 3,074.74 crore in the same quarter last fiscal, IOB said in a filing to the BSE. Net interest income during the quarter rose by 32.43 per cent to Rs 1,266.39 crore from Rs 956.30 crore...

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RBI penalises two cooperative sector banks

Mumbai: The Reserve Bank has imposed a penalty of Rs 5 lakh each on two cooperative sector lenders – the Pravara Sahakari Bank and the Baroda Traders Co-operative Bank -- for violation of various norms. "RBI has imposed a monetary penalty of Rs 5 lakh on Pravara Sahakari Bank Ltd, Ahmednagar, Maharashtra... for violation of directives/guidelines of the RBI on maximum limit on advances as modified from time to time, by sanctioning loans to trusts managing different colleges in excess of the single borrower norm," the apex bank said in a statement. The...

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Stop gradually use of cheques: RBI to NBFCs

As part of its green initiative, the Reserve Bank of India (RBI) today asked all non-banking financial companies (NBFCs) to gradually phase out use of cheques and shift to electronic payment system. The government, in its green initiative efforts, has suggested several steps for entities in financial sector, including NBFCs, for better utilisation of resources and delivery of services. "NBFCs are therefore, requested to take proactive steps in this regard by increasing the use of electronic payment systems, elimination of post-dated cheques and...

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SBI may raise saving deposit rate by up to 125 bps

State Bank of India (SBI) on Friday indicated that it could increase interest rate on savings bank accounts by up to 1.25 per cent in view of competition following freeing of such rates by RBI. “On an average...we are expecting 100-125 basis points increase in the funding cost of savings bank,” said Mr Pratip Chaudhuri, Chairman, SBI. Earlier this week, the Reserve Bank had deregulated the savings bank deposit interest rate with immediate effect giving banks freedom to determine their own rates. Immediately after the announcement, private sector...

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IDBI Bank to repay bonds on Dec 16

IDBI Bank on Friday announced the book closure for repayment of the 2011 bonds, maturing on December 16, on November 16. The principal amount of the 2011 bond series is repayable at par on December 16. Accordingly, interest on these bonds will accrue up to December 15. Book closure of the 61st series will be effective from November 16,” the lender said in a statement here. Investors holding the bonds in the form of promissory notes may tender the same at their respective branch where they were last enfaced by November 21 to facilitate repayment...

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Oriental Bank of Commerce plans to open 79 branches thru restructuring exercise

The branch network re-structuring exercise, which Oriental Bank of Commerce started last year, has given it a scope to open 79 branches across India, according to a top official of the bank. As part of the exercise, the bank had last year hoped to club a redundant branch with other branches. “We use those licences to areas where we don't exist. By doing that, we have been able to get some business out of those areas, which we were not able to access through our earlier set-up,” Mr Nagesh Pydah, Chairman and Managing Director, Oriental Bank of Commerce,...

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Dhanlaxmi Bank shrugs off charges of misdemeanour

Dhanlaxmi Bank has dismissed accusations of financial irregularities as ‘motivated attempts' by one of the employee associations de-recognised by the bank. The association had accused that the bank has borrowed high-cost funds in the form of Certificate of Deposits (CoD) of about Rs 2,500 crore, among others. An official spokesman quoted the bank management as saying that in fact the most the bank is allowed to raise through the CoD route is Rs 1,500 crore. ‘WRONG ON FACTS' There are multiple examples of such falsification of accounts by the association,...

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Muthoot Finance Q2 net zooms 88%

Gold loan company Muthoot Finance Ltd has registered a growth of 88 per cent in its net profit to Rs 215 crore for the second quarter ended September 30 against Rs 115 crore in the corresponding period of the previous fiscal. The figures for six months ended September 30 stood at Rs 406 crore against Rs 199 crore in the year-ago period. The total income for Q2 FY12 stood at Rs 1,105 crore against Rs 529 crore in Q2 FY11, a growth of 109 per cent. The retail loan assets under management increased by Rs 2,991crore to Rs 20,940 crore. Mr George Alexander...

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High savings deposit rate likely to dent banks' profits

Fears of banks’ earnings plummeting in a deregulated savings deposit rate regime appear to have gripped investors, with most analysts hinting that profitability may come under pressure due to higher cost of funds amid slowing growth in advances. “The rise in the savings deposit rate will increase pressures on banks’ profitability,” Suman Chowdhury, head of Crisil Ratings, said. The rating agency expects the lenders’ return on asset ratio to shrink by five basis points (bps) because of higher savings deposit rate, even if banks increase their transaction...

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A 'rational' look at bank pay soon as RBI readies guidelines on banking sector remuneration

MUMBAI: RBI is readying a set of guidelines on the banking sector remuneration to ensure that private and foreign lenders in India do not go overboard in their attempt to rope in high-profile bankers and denting their bottomlines. The banking regulator, which has in the past expressed concerns about fancy compensation packages of private and foreign bank chiefs, is working on the guidelines of Financial Stability Board ( FSB) and Basel Committee on Banking Supervision (BCBS) to draft its principles for banking sector remuneration. Compensation...

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Banks need to be recapitalised to meet Basel III norms: RBI

The Reserve Bank of India (RBI) today said banks would have to be recapitalised to help them achieve Basel III capital adequacy norms and would issue a detailed guideline on the matter by December-end. "While at present, at the system level, banks in India are adequately capitalised, and transition to Basel III is expected to be smooth, careful capital planning would be required by banks in view of substantially higher equity requirement in capital," the RBI said in its policy review. The draft guidelines for banks for implementing the Basel III...

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Lending, deposit rates unlikely to go up immediately, say bankers

Borrowers may get a respite from rising rates, but depositors may be in for some disappointment. Banks are unlikely to increase either lending or deposit rates immediately, despite the Reserve Bank of India raising key short-term rates by 25 basis points. Even savings bank deposit holders hoping to see an increase in interest rates following the de-regulation in SB rates may have to wait a while, as bankers don't expect interest rates to go up immediately. However, transaction costs could go up as a result of the de-regulation, bankers added. The...

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SB account rate deregulation to push up banks' interest cost: Vijaya Bank CMD

Bangalore, Oct 25: Mr H.S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, told that the rate hike today was on expected lines, which the market has already factored in. "It is too premature to say that whether we will transmit to customers and if at all, when as the RBI has asked banks to come out new product schemes on the savings bank front. Savings deregulation will result in some increase in interest cost to banks. So it is a different situation from the last RBI rate hike, and in my opinion, transmission might be required not...

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State Bank of Mysore may hike base rate

Bangalore, Oct. 25: Mr Dilip Mavinkurve, Managing Director, State Bank of Mysore, says: “With cost of funds inching up now for State Bank of Mysore, we could look at increasing our base rate now. When the RBI increased the rates in September, we did not pass it on to the customer. But now, we could hike the interest rates, and our ALCO would meet after the Diwali holiday to decide on this. It would most likely be a 25 basis points hike, as we would look at transmitting the rate hike that the RBI is expecting us to do. Though inflation has not really...

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RBI eases branch authorisation policy

Mumbai, Oct 25: The RBI has today relaxed the branch authorisation policy for banks planning to expand in Tier 2 centres. Tier 2 centes are those towns with a population of between 50,000 and 99,999 as per Census 2001. The RBI feels that branch expansion in Tier 2 centres has not taken place at the desired pace. Therefore, to provide enhanced banking services in Tier 2 centres, the RBI proposes to permit domestic scheduled commercial banks (other than regional rural banks (RRBs) to open branches in Tier 2 centres without taking prior permission...

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RBI frees savings bank interest rate

Mumbai: Ending the era of controlled interest rate regime, the Reserve Bank of India (RBI) today freed savings bank deposit rates, a step which bankers said could fetch better returns for depositors as competition will intensify. "...banks are free to determine their savings bank deposit interest rate," the Reserve Bank of India (RBI) said, adding the change will come into force with immediate effect. While freeing interest rates on savings bank accounts, the RBI has said that banks will have to offer a uniform interest rate on deposits of up to...

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Kotak Mahindra Q2 net up 18.8%

Mumbai: Private sector lender Kotak Mahindra Bank has reported an 18.8 per cent jump in net profit to Rs 432.58 crore for the second quarter ended September 30, 2011. The bank had posted a net profit of Rs 364.11 crore in the July-September quarter of 2010. Total income of the bank during the quarter fell to Rs 2,740.84 crore from Rs 2,947.21 crore, Kotak Mahindra said in a filing to the BSE. During the first six months of the current fiscal, the bank's net profit rose by 22.68 per cent to Rs 848.68 crore from Rs 691.80 crore in the same period...

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RBI says prepayment penalty on home loans to go in a month

Mumbai: Borrowers wanting to prepay home loans can look forward to some relief as RBI today said it will hopefully scrap the prepayment penalty within a month. "We will pursue with the banks to do this (ending prepayment penalties) as soon as possible. But should the system require some time to adjust to this, we are prepared to give them," RBI Governor Subbarao told reporters at the customary post-policy press conference here. The quantum of prepayment penalty on floating rate home loans varies from 2 per cent to a high of 6 per cent. Public sector...

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Home loans of up to Rs 15 lakh may get 1% interest subsidy

To give a boost to the housing sector, the government may increase tomorrow the home loan cap for availing 1% interest subsidy to Rs 15 lakh from existing Rs 10 lakh. The government may also raise the ceiling on cost of house to Rs 25 lakh from Rs 20 lakh to avail this benefit. The Union Cabinet in its meeting tomorrow may take decision on the matter, sources said. Under a scheme introduced in 2009, home loan borrowers now get 1% interest subsidy on bank loans of up to Rs 10 lakh, provided the cost of the house does not exceed Rs 20 lakh. Finance...

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RBI mulls relaxing bank branch expansion norms for opening branches in Tier 2 centres

MUMBAI: RBI on Tuesday proposed relaxing branch expansion rules allowing banks to open branches in Tier 2 centres without taking prior permission from the Reserve Bank. Branch expansion in Tier 2 centres-with population between 50,000 to 99,999 as per Census 2001-have not taken place at the "desired pace", the RBI said in its second quarter monetary policy review. The RBI raised interest rates for the 13th time since early 2010 but gave a strong signal it may be finished with its current tightening cycle as growth slows and it expects high inflation...

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SBI not in a hurry to raise rates now: Chairman Pratip Chaudhuri

MUMBAI: State Bank of India, the country's top lender, is not in a hurry to raise interest rates now, its Chairman Pratip Chaudhuri said on Tuesday. "We don't see pressure now. Banks are comfortable with the liquidity now. Banks will not be desparate to raise rates," Chaudhuri said at a post policy bankers' meeting with media. Earlier in the day, RBI raised interest rates for the 13th time since early 2010 to battle stubbornly high inflation but signalled it may end the tightening cycle that has put it at odds with peers more concerned about weak...

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RBI ups rates 25 bps, says no more hikes

Mumbai: The Reserve Bank of India (RBI) raised interest rates on Tuesday for the 13th time since early 2010 but gave a strong signal it may be finished with its current tightening cycle as India's economic growth slows and it expects high inflation to ease starting in December. The RBI raised its policy lending rate, the repo rate, by 25 basis points to 8.5 percent. It also revised down its growth forecast for the current fiscal year ending in March to 7.6 percent from 8 percent with a downward bias earlier, while sticking with its forecast that...

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