J&K Bank signs MoU with ONICRA for MSME rating

Jammu, Nov 12: J&K Bank on Saturday signed a memorandum of understanding with ONICRA Credit Rating Agency for rating of micro, small and medium enterprises (MSME) which are either prospective or existing customers of the bank. With a purpose to support the MSME sector, the pact was signed by Mr O P Sharma, President and Zonal Head, Jammu on behalf of J&K Bank and Mr Rajiv Soni, Business Group Head (SME) on behalf of ONICRA. After signing the pact Mr O P Sharma said, “Rating through the credit agency will act as an additional input for the...

Read more »

Small savings rates hiked; PPF limit raised to Rs 1 lakh

Interest rates on small savings have been hiked in the range of 4 per cent up to 8.6 per cent. The investment limit for Public Provident Fund (PPF) has also been increased by Rs 30,000 to Rs 1 lakh, as also the interest rate at 8.6 per cent from 8 per cent at present. Announcing the new norms on Friday, the Finance Ministry said the new rates will be applicable from the date of notification which will be announced soon. From next year, the rates would be notified before April 1, it added. The small saving schemes have been restructured on the basis...

Read more »

RBI cancels Solapur Nagari co-op bank licence, fines 4 others

The Reserve Bank on Friday cancelled the licence of Solapur-based Nagari Audyogik Sahakari Bank Niyamit due to financial insolvency. “In view of the fact that Solapur Nagari Audyogik Sahakari Bank Niyamit had ceased to be solvent, all efforts to revive it in close consultation with the government of Maharashtra had failed and the depositors were being inconvenienced by continued uncertainty, RBI delivered the order cancelling its licence to the bank,” the apex bank said in a statement. It said that the Registrar of Cooperative Societies, Maharashtra,...

Read more »

SKS Microfinance likely to write off Rs 300 cr more

SKS Microfinance Ltd is likely to write off about Rs 300 crore in the next two quarters due to the Andhra Pradesh Microfinance Act. “The residual exposure at risk on Andhra Pradesh works out to Rs 337 crore after adjusting deferred tax assets and accounting for tax-breaks at future write-offs,” the company informed investors on Wednesday. The Hyderabad-based microfinance institution had already written off Rs 326 crore during the second quarter ended September 30, 2011. “We expect SKS to write off this exposure at risk either in one go or in a...

Read more »

HDFC to enter education sector

Housing finance major, HDFC Ltd, is planning to set up schools and provide allied services like vocational training or teachers' training programmes. The company, which already offers educational loans through its subsidiary Credila Financial Services Private Ltd, will now provide financial support for setting up educational institutions or improving existing institutions. A press release issued on Wednesday, quoted Mr Deepak Parekh, Chairman, HDFC, as saying, “To support such an initiative, we will start with some baby steps and envisage building...

Read more »

Now, send money from ATM to mobile

In a bid to encourage the use of mobiles for banking transactions, the Reserve Bank of India has allowed the National Payments Corporation of India to facilitate money transfer by a bank customer from an ATM/Internet to a beneficiary's mobile phone. The RBI's permission to expand the scope of the money transfer mechanism through the NPCI-promoted Interbank Mobile Payment Service comes at a time when mobile banking transactions are growing at a slow pace. Slow growth Ever since IMPS was launched in August 2010, the number of mobile banking transactions...

Read more »

CARE, Fitch maintain 'stable' view on banking sector; ICRA says it is concerned over asset quality

KOLKATA: Global ratings firm Moody's Investors Service on Wednesday downgraded its outlook for the Indian banking system to "negative" from "stable" on concerns over asset quality, capitalisation and profitability. Fitch Ratings, another rater, will release its next 2012 banking system report next month while its current outlook for the sector remains stable. Moody's said a "negative" outlook is characterised by volatility and uncertain conditions. The outlook applies for the next 12 to 18 months. Meanwhile, the finance ministry has questioned...

Read more »

Souring bank loans, car sales fuel India's economic gloom

India's economic gloom deepened on Wednesday as worsening loan quality at SBI rattled investors, Moody's downgraded its outlook for banks, and October car sales skidded 24%, their worst drop in over a decade. The RBI has raised interest rates 13 times since early 2010 but has failed to rein in inflation, which remains above 9%. Instead, asset quality at banks is eroding and growth in India is slowing. "More softening in demand indicators is likely, so to that extent the light at the end of tunnel is not in sight yet," said Radhika Rao, an economist...

Read more »

Home loan subsidy effective from April

Mumbai: The liberalised scheme for one per cent interest subsidy by government on home loans up to Rs 15 lakh will be available for the borrowers whose requests were sanctioned and disbursed from April this year. The new housing scheme under which the loan limit for interest subvention was raised to Rs 15 lakh, subject to the total housing cost of Rs 25 lakh, will remain valid up to March 2012, the Reserve Bank said today. "Loans sanctioned and disbursed between October 1, 2009, and March 31, 2011, are outside the ambit of the new liberalised scheme...,"...

Read more »

Post office savings rate to be hiked to 4%

New Delhi: In a development that will benefit millions of small savers, the government has decided to increase the interest rates on post office savings deposits to 4 per cent, from 3.5 per cent at present. "We have taken a decision. We will be issuing a release on that soon," Economic Affairs Secretary R Gopalan said, when asked whether the government is proposing to raise interest rates on post office savings bank account to 4 per cent. Small savings schemes run by post-office, which are a major source of government's borrowings, are losing sheen...

Read more »

Ensure customer identification even while using 'Aadhaar': RBI

Mumbai : The RBI today directed urban cooperative banks (UCBs) to ensure customer identification proof while opening accounts on the basis of details provided by the unique national identity number 'Aadhaar'. "... it is advised that while opening accounts based on Aadhaar also, banks must satisfy themselves about the current address of the customer by obtaining required proof of the same as per extant instructions," the Reserve Bank said in a circular to UCBs. RBI had in September directed banks to accept the Aadhaar card, issued by the Unique...

Read more »

Moody's downgrades banks' outlook

Mumbai, Nov 9: Global credit rating agency Moody's Investors Service has revised its outlook for India's banking system to negative from stable. It also warned that bank ratings may come under downward pressure. This change in outlook is due to concerns that an increasingly challenging operating environment will adversely affect asset quality, capitalisation, and profitability of Indian banks. “India's economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates,” said Mr Vineet Gupta, Vice-President...

Read more »

SBI: Asset quality continues to slip

Even as the profit growth of State Bank of India (SBI) beat street estimates, asset quality worries continued to exert pressure on the bank's operating performance. In spite of showing a 12.3 per cent year-on-year growth in September quarter's net profit, higher slippages in non-performing assets (NPA) led to the SBI stock losing 6.76 per cent in Wednesday's trade.NPA woes continue SBI's gross NPA grew 22 per cent between June 2011 and September 2011 as against 19 per cent by other public sector banks (PSBs). This even as SBI already has higher...

Read more »

SBI standalone profits up 12% in Q2

Mumbai, Nov 9: State Bank of India has reported a 12 per cent increase in net profit at Rs 2,810 crore in the July-September 2011 quarter, against Rs 2,501 crore in the corresponding period last year. Shares of SBI were trading lower at Rs 1,907 at 1300 hours on the BSE, against the previous close of Rs 1,997.55. The financial performance of India’s largest bank has relatively improved in the second quarter. In the first quarter-ended June 2011, its net profit was down 46 per cent at Rs 1,584 crore, against Rs 2,914 crore recorded in the same...

Read more »

ING Vysya, LIC pact for ePayment

Bangalore, Nov. 9: ING Vysya Bank signed an MoU with Life Insurance Corporation of India on Wednesday for ePayment services at all LIC branches across the country.  The bank will now offer its Payments platform, ING P@y, to LIC, said a press release from the bank. The initiative was taken on the back of a regulatory directive to LIC to use ePayments as a mode for making payments to policyholders. ...

Read more »

Indian Bank opens Hubli zonal office

Bangalore, Nov. 9:Indian Bank opened its Hubli zonal office to cater to its customers in northern and coastal Karnataka. This will be the bank's second zonal office in Karnataka. Hubli zone has 33 branches across 19 districts in Karnataka and six branches in Goa.  “The formation of Hubli Zone will enable Indian Bank to increase its participation in the developmental and economic activities of this part of Karnataka and also in the Government-sponsored schemes of Central and State Governments in a big way,” said Mr T.M. Bhasin, Chairman and...

Read more »

Allahabad Bank freezes lending loans to power sector on increasing financial stress

MUMBAI: Financial stress to banks caused by the power industry increased with Bank of India set to restructure a quarter of its power loans and Allahabad Bank freezing lending to the sector whipsawed by losses at state distributors and hurdles to new plants. Loans to Tamil Nadu Electricity Board and Rajasthan Electricity Board will be restructured - the tenor of the loans and interest payable will be changed - to avoid an imminent default and firewall banks from rising bad loans, senior bank officials said. "We have received requests from one or...

Read more »

SBI captial infusion: Govt may opt for warrants due to price lock and deferred payment

NEW DELHI: The government may opt for warrants issue to infuse capital into the State Bank of India, helping it lock into the current low stock price and leverage its existing resources. The finance ministry aims to provide Rs 10,000 crore to the bank this year, of which Rs 2,900 crore could be given immediately from the resources set aside in the budget. "Differential voting rights is out of question and rights issue will require immediate allotment of funds which the government is not in a position to allocate," a finance ministry official told...

Read more »

Banks start waiving prepayment penalty

Initially reluctant to waive the prepayment penalty on floating rate retail loans, banks have now started to fall in line with the regulator’s advice. The Reserve Bank of India (RBI) had questioned the necessity of levying charges that penalise borrowers repaying their loans before the maturity period. State Bank of India (SBI), which earlier waived the prepayment penalty for new customers, has now extended the benefit to existing customers. Bank of India, Indian Bank and United Bank of India have also waived the prepayment penalty, and a few other...

Read more »

Franklin Templeton unveils Corporate Bond Fund

Mumbai: Franklin Templeton Investments has launched a NFO 'Templeton India Corporate Bond Opportunities Fund' aiming to help investors take advantage of the current high yields and to build a strong presence in pure fixed income space. The new fund offer (NFO), opens for subscription on November 15 and closes on November 29. The fund also aims at allowing capitalisation on opportunities by active interplay on credit, liquidity and interest rate opportunities, Franklin Templeton said in a release. "We believe that the corporate bond market provides...

Read more »

HCBL Co-operative Bank Ltd adopts village for financial inclusion

LUCKNOW: HCBL Co-operative Bank Ltd, as a part of its financial inclusion policy, has adopted a village Chota Bharwara in Chinhat on the outskirts of Lucknow. It would be offering a multitude of modern banking services to the residents of the village as well as surrounding areas. These services include opening of bank accounts, providing loans and provision of various other social responsibility measures, especially to the weaker section and women. A camp was also organised in the village on Tuesday which was inaugurated by Ex-Regional Director,...

Read more »

IRDA, SEBI finalise IPO norms for life insurers, to be notified soon

Hyderabad, Nov 8:The much-awaited norms for the initial public offerings of life insurance companies are finally ready. "The guidelines framed by us are also approved by the Securities and Exchange Board of India. They will be notified in the Gazette by the Government within days,’’ Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, told newspersons here on Tuesday. The insurance regulator has finalised the norms last year which were sent to the market regulator for its approval. On the proposed changes in the Motor Third...

Read more »

ex-Citi mgr embazzled $5 mn, court told

Jakarta: A former Citibank relationship manager was charged with embezzling more than $5 million of her clients' money, a Jakarta court heard on Tuesday, in a sports-car fuelled case that has shaken up the wealth management business in Indonesia. Inong Malinda Dee, 49, ordered 117 transfers each worth up to 2 billion rupiah ($223,000) from her Citigold clients' accounts to her or acquaintances' accounts between 2007 and 2011 for purchases including Ferrari, Porsche, Mercedes and Hummer cars, as well as apartments and houses, prosecutors said. Dee,...

Read more »

Savings rate hike on deposits flight: SBI

Country's largest lender State Bank of India (SBI) today said it will take a call on increasing interest rate on savings accounts if there is a flight of deposit to other banks. "There had been accretion (to savings bank deposits)," SBI Chairman Pratip Chaudhuri said when asked whether the bank was planning to raise interest rate as was done by some private sector lenders. "If we see there is flight or shift of deposits, then we will take a call," he said, explaining bank's stand on saving rate. Last month the Reserve Bank deregulated interest...

Read more »

Bank of India doesn't have slippages on power sector loans

MUMBAI: State-run lender Bank of India does not have slippages on power sector loans and has total exposure of about 80 billion rupees to the sector, its executive director said on Tuesday. Certain state electricity boards have requested the bank to restructure accounts and the bank would take action in due course, B. A. Prabhakar, told reporters. Source: EconomicTi...

Read more »