Subsidies are bad: D Subbarao

Chandigarh: Advocating fiscal consolidation and containment of fiscal deficit, Reserve Bank Governor D Subbarao today termed subsidies given on fuel, fertiliser and irrigation as "bad" ones and stressed on weeding out unproductive expenditure. Delivering the P N Haksar Memorial lecture here, Subbarao said, "In charting a roadmap for fiscal consolidation, we need to be mindful of the quality of fiscal adjustment-- which is to weed out unproductive expenditure and protect growth promoting expenditure," he said. Sharing his thoughts on subsidies in...

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Reduced commissions to hit women agents selling post office saving schemes the most

In a bid to win back small savers, the government recently announced hike in interest rates on various post-office savings schemes. It also announced that it will implement the recommendations made by the Shyamala Gopinath Committee on reform of the small savings fund. But over 6 lakh agents who sell schemes like the post-office recurring deposits, the monthly income scheme and the public provident fund fear that they may have to cope with a drastic reduction in their income if commissions on these schemes are reduced, as proposed by the committee....

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Payments crisis: RBI allows Iranian central bank to open A/Cs with UCO and IDBI

KOLKATA: In an effort to resolve a long-standing payment crisis, the Reserve Bank of India (RBI) has given permission to the Central Bank of Iran to open rupee accounts with two Indian banks, namely UCO and IDBI. "Permission from the RBI has very recently come to open rupee accounts with two Indian banks, one of which is UCO," a top official of city-based UCO Bank said. The other bank is IDBI Bank. Both the accounts were opened in the respective banks' Mumbai branches. The official said since the closure of the Asian Clearing Union (ACU) in December,...

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IDBI Bank begins ‘Aadhaar' enrolments in Kerala

IDBI Bank, one of the Registrars under the ‘Aadhaar' project has launched its enrolment in the State. The enrolment was launched on Wednesday from seven branches in five locations for the bank customers, their relatives and other residents. CUSTOMER CARE Mr S.Andi, Chief General Manager and Head - Financial Inclusion Department, IDBI Bank, formally inaugurated the programme at the Vazhuthacad branch in the city. Mr K. Ramaswamy, Chief General Manager and Head - PBG (south) and Mr Krishnadas C. H., Regional Head (Kerala) were also present. Welcoming...

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Bank loans in Odisha grow 37% year-on-year, more than the national average

KOLKATA: Commercial banks operating in Odisha have grown their advances in the state by a good 37% in the last one year, much better than the national average of 18.4%. With this growth, banks' total outstanding advances in the state stood at Rs 74,721 crore at the end of September, compared with Rs 54,565 crore a year back, the state's banking committee convenor Uco Bank said on Friday. It said banks have collectively opened as many as 197 branches in Odisha during the last 12 months. Their deposit mobilisation has grown 24% to Rs 1.10 lakh crore...

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Union Bank hikes BPLR by 50 basis points

Union Bank of India has hiked the benchmark prime lending rate by 50 basis points to 15.5 per cent with effect from November 28, the bank said in an announcement on the Bombay Stock Exchange. This means a hike in interest rates on all loans linked to the BPLR.  The bank's Base Rate remains unchanged at 10.75 per cent. According to an official from the bank, the hike is mainly to loans linked to the BPLR to the Base Rate. “Most of our loans have shifted to Base Rate and we want all our customers to move to the BPLR,'' he said. Union Bank also...

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RBI deregulates interest on savings accounts in UCBs

MUMBAI: The Reserve Bank today deregulated interest rate on savings accounts in Urban Co-operative Banks (UCBs), a move that will fetch better returns for depositors. RBI had freed savings bank deposit rate for the scheduled commercial banks last month. Subsequently, it had liberalised this for the Regional Rural Banks earlier this week. In a notification addressed to all Primary (Urban) Co-operative Banks, RBI said lenders are free to determine their savings bank deposit interest rate subject to two conditions. Under the first condition, the notification...

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SBI, Oriental Bank hike interest rates on select NRE deposits

State Bank of India on Friday hiked its interest rates on certain non-resident (external) rupee (NRE) deposit accounts by 100 basis points. This follows RBI's recent move to hike the ceiling rates on NRE term deposits for one to three years maturity by 100 basis points. Interest rates on foreign currency non –resident (banks) deposits have been hiked by 25 basis points so as to encourage non-resident Indians to park more of their savings in India. SBI on Friday increased interest rates on FCNR (B) deposits by 25 basis points in all the six currencies...

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Insurance venture: Bharti ends talk with Reliance

Bharti Enterprises and Reliance Industries on Friday terminated talks for the stake sale in Bharti AXA insurance companies due to differences over issues related to long term vision and joint governance. “AXA, Bharti, Reliance Industries (RIL) and its associate Reliance Industrial Infrastructure (RIIL) announced today that they have mutually agreed to terminate their negotiations on the proposed acquisition by RIL and RIIL of Bharti’s shareholding of 74 per cent in Bharti AXA Life Insurance and Bharti AXA General Insurance,” Bharti said in a statement. In...

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Bank of Maharashtra gets new CMD

State-owned Bank of Maharashtra on Friday said the government has appointed Mr Narendra Singh as its new Chairman and Managing Director (CMD). He will replace the incumbent Mr A S Bhattacharya, who retires on January 31, 2012, Bank of Maharashtra informed the Bombay Stock Exchange. Mr Singh is now Executive Director of Corporation Ba...

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HSBC joins National Financial Switch

The country’s umbrella body for retail payments, National Payments Corporation of India (NPCI), today said global banking major HSBC has joined the National Financial Switch (NFS) operated by it. By joining the NFS, HSBC’s customers will be able to access a network of over 85,000 automated teller machines (ATMs), NPCI said in a statement issued here. HSBC has 46 branches and 115 ATMs in the country, it said, adding that the network already has 63 banks as members....

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Pvt Life insurers policy issuance dips 35% since April

Life insurance premium collection down 20%. The pension saga continues to take toll on the life insurance industry, particularly for the private players, as the number of policies issued by them is down by nearly 35 per cent, in the current financial year. During April-October period, the number of policies issued by the largest life insurer, Life Insurance Corporation (LIC) of India, too, declined by eight per cent in the same period. As a result the first year premium collection of the life insurance industry, was down by 20.04 per cent to Rs...

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Mid-sized investment banks such as Chicago's Lincoln Int, Japan's Mizuho, UK's Investec plan setting up arms in India

NEW DELHI: At a time when global investment banks, such as Bank of America, Merrill Lynch, UBS, Nomura and HSBC are downsizing their operations in India, a clutch of niche and medium sized I-Banks are entering the world's second fastest economy. Nearly half a dozen new IBanks, such as Chicagobased Lincoln International, Japan's Mizuho, UK-based Investec and Espirito Santo of Portugal, are setting up operations in India either as a wholly-owned subsidiary or in partnership with Indian entities. "We are positive on the India opportunity and our sweet...

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SBI to scrap pre-closure penalty on home loans

State Bank of India has decided to abolish the pre-payment charges on home loans, giving some succour to borrowers who want to foreclose their accounts. “We have decided to do away with the pre-payment charges on all kinds of housing loans with immediate effect,” a senior official of the bank told PTI. The bank has been charging pre-payment penalties only on housing loans with floating interest rates taken before May 2011, the official said. It has been charging about 2 per cent of the outstanding amount as penalty if borrowers opted to foreclose...

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Govt stake in IDBI Bank to go above 70%

The Government's stake in IDBI Bank could go above 70 per cent as the former is agreeable to convert its investment in the bank's bonds into equity. Currently, the government has 65 per cent stake in the public sector bank. IDBI Bank has notified the BSE that the Government has informed it that they are agreeable, in principle, to convert the Tier-1 bonds of Rs 2,130.50 crore issued to Government by IDBI Bank into equity share capital of the bank, subject to all regulatory and statutory requirements. “The bonds were maturing in 2022 and carried...

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IRDA launches mobile app to compare insurance products

The Insurance Regulatory and Development Authority (IRDA) has introduced a mobile application that enables one to compare insurance products and premium rates. The application currently allows users of mobile phones with Internet connectivity to check and compare the features of Unit Linked Insurance Policies (ULIPs) introduced on or after September 1, 2010. “The application has been developed with the objective of providing consumers a mechanism to make informed decisions by comparing features of insurance products on their mobiles,” said IRDA...

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Punjab National Bank's salary scheme for Kerala Govt employees

Punjab National Bank has announced a special salary savings account package for Kerala State Government employees. Under this ‘Total Freedom Salary Account scheme,' employees can maintain a zero balance account . There will not be any type of charges under the scheme. On the day of salary the amount will be credited instantly. There is also a provision for advance salary in the form of overdraft facility, Mr K.V. Rajesh, Circle Head of the bank, said. Employees can operate their account in any of the PNB branches without any charges. They will...

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Others to follow SBI in raising deposit rates

The country's largest bank, State Bank of India (SBI), which recently launched an aggressive deposit mobilisation scheme that offered 8.5 per cent for tenures of seven days to 180 days, has caught the competition off its guard, and other banks are now considering launching similar products. The new deposit scheme from SBI, launched earlier this week, would be applicable to deposits of more than Rs 1 crore. SBI has waived the pre-withdrawal penalty after seven days to make the product attractive. Private sector lender Federal Bank followed suit...

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ICICI Bank eyes Indian loans at European banks: Chanda Kochhar, CEO

MUMBAI: India's biggest private lender ICICI Bank is open to buying loan portfolios of European banks, its chief executive said, as banks in the region look to deleverage and offload loans to shore up capital base. "The opportunity to pick up some good assets at good pricing clearly exists. So, that's what we are looking at all the time and exercising it whenever we see the right opportunity," Chanda Kochhar told the Reuters India Investment Summit on Wednesday. "We have picked up some which are India-related assets, but I would say not very large...

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L&T Infra launches tax-free bonds; mulls ECB route for funds

Diversified conglomerate L&T’s infrastructure finance arm today said it is looking to broadbase fund sources and exploring external commercial borrowing (ECB) route even as the global markets remain weak. L&T Infrastructure Finance has raised $90 million through the ECB window this fiscal and is aiming to raise more, Chairman and Managing Director of L&T Finance Holdings Mr Y M Deosthalee told reporters here. L&T Infrastructure Finance is a unit of the recently-listed L&T Finance Holdings. L&T Finance Holdings President...

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Post office savings,PPF to fetch better returns from Dec 1

NEW DELHI: PPF account holders, small depositors and persons keeping money in the schemes operated by post offices, will get higher rate of return from December 1, 2011. The government today notified increase in interest rates on public provident fund (PPF) to 8.6 per cent from 8 per cent now, and also raised ceiling on annual contributions to the fund to Rs one lakh from Rs 70,000. Interest rates on savings account in post offices would also go up to 4 per cent from 3.5 per cent at present. Similarly, interest rates on deposits of other maturities...

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Interest rates have peaked: HDFC MD

NEW DELHI: HDFC Ltd Managing Director Renu Sud Karnad today said interest rates have reached their peak and there should not be further hikes in the future. "I think it (interest rate) has already reached the peak and I personally feel there should not be any more hike. The recent hike started hurting industry," Karnad told PTI on the sidelines of a CREDAI Summit here. Last month, the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 8.50 per cent and the reverse repo rate moved up by a similar percentage to 7.50 per cent. Repo...

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Banks to offer higher returns on NRI deposits to lure dollars

MUMBAI: A runaway currency has pushed the Reserve Bank of India to make interest rates more tempting for NRIs to bring in dollars. As the rupee closed at a new low on Wednesday, RBI allowed banks to offer higher return on dollar as well rupee deposits parked by NRIs. Banks can now give 125 basis points over London Inter-bank Offered Rate, or Libor - the benchmark rate in international money markets on foreign currency non-resident accounts against a mark-up of 100 basis points permitted till now. On non-resident (external) or rupee deposits, the...

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Standard Chartered hires HSBC's Katerji for senior MENA job:Sources

DUBAI: Standard Chartered Plc has hired senior HSBC banker Haithem Katerji to head up its Middle East and North Africa financial institutions group, two sources familiar with the matter said. In his new role, Katerji will be reporting to the bank's global head of client coverage in Singapore, one of the sources said, speaking on condition of anonymity. Katerji has been involved in several regional high-profile deals at HSBC. A Standard Chartered spokesman in Dubai declined comment. London-headquartered Standard Chartered, which makes more than...

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Validity of cheques to reduce from 6 to 3 months

The government today said the Reserve Bank of India (RBI) has decided to reduce the validity of cheques and bank drafts from the present six months to three months beginning next fiscal. The RBI has advised that with effect from April 1, 2012, banks should not make payments against cheques, drafts, pay orders or banker's cheques if they are presented after the period of three months from date of issue, the Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha yesterday. "It was reported to Central Economic...

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ING Vysya Bank, Oriental Insurance pact for e-payment service

ING Vysya Bank has signed a memorandum of understanding with the state-owned Oriental Insurance Corporation (OIC) for offering ePayments services through all its branches across India.  Oriental Insurance has selected ING Vysya Bank's payment platform ING P@y, after the general insurer initiated e-payments as a mode of payment to its customers, said a press release from the bank. ING Vysya Bank had earlier this month signed a similar MoU with state-owned Life Insurance Corporation of India....

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Licensing of new banks: Industry bodies seek changes in listing norms

Apex industry associations such as Ficci and Assocham have urged the RBI to increase the time-limit for listing of shares by new banks in the private sector to at least five years. The draft guidelines for ‘licensing of new banks in the private sector' stipulates that new banks should get listed on the stock exchanges within two years of licensing. This stipulation is not pragmatic and feasible as the new banks may take considerable time to establish their operational and strategic performance, Assocham said in a note to the RBI. The FICCI said...

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IRDA favours zonal bancassurance tie-ups

New insurance companies are likely to benefit from the Insurance Regulatory Development Authority draft guidelines on bancassurance. The regulator has divided the country into geographical zones. The IRDA's exposure guidelines on bancassurance have said that banks cannot tie up with more than one life, one non-life and one standalone health insurance company in any of the States. Further, provided that in case the agreement of general insurer/s does not have any health product to distribute, the bancassurance agent may tie up with one more general...

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